Cash is an evergreen provision, and one with which every single one of us has actively engaged. It, in no uncertain terms, makes the world go around. But cash could soon be on the way out, as technological payment solutions fast replace transactions previously governed through the handing-over of notes and coins.
But why is cash potentially on the decline? How did we get here, and how long might it be before cash is eradicated entirely? Here, we will examine the various mechanisms by which cash has been usurped as a method of payment – and whether its days are numbered as a result.
Why Might Cash Disappear?
Simply put, new methods of payment have become much more accessible and prevalent – providing quick and simple ways to transact that do not require the acquiring, holding, and transferring of physical currency.
Financial technology has progressed exponentially since its early days in electronic banking processes. Where once fintech was simply the mechanism by which we could use ATMs to withdraw money, today fintech threatens to render the ATM altogether obsolete.
Contactless card payments created a new layer of ease with regard to debit card payments, and in 2017 saw debit card transactions overtake cash transactions for the first time in history. The rise of e-commerce, and the new ubiquity of online one-click shopping, has further reduced our need for physical currency, as platforms like PayPal enable unfettered transactions. Likewise, alternative banks enable swift peer-to-peer payments, eliminating the need for cash to repay casual debts.
The Business Benefits of Cashless Society
Of course, this tendency towards a cashless society has a number of boons for the business world. It has spawned progressive development in the tech world, where digital currencies have become formidable speculative assets. In collaboration with a fintech law firm, any given business can incorporate a new, compliant, decentralised and international form of transaction into their service to participate in progressive markets.
The straightforward benefits have already been experienced by businesses expanding their online storefronts, where cashless customers continue to increase in number due to the sheer convenience of next-day home delivery.
A Farther Future Than Expected
But, despite the rampant and fast-paced nature of fintech’s evolution towards cashless capabilities, physical currency is unlikely to be going anywhere any time soon. As a store of value, physical cash is indispensable – and, rather than decrease, the amount of physical money in circulation has actually increased significantly since the 1970s.
Not only is cash a useful store of value for conventional business, but it is also unavoidably more equitable than digital payment solutions. Even as smartphone ownership nears ubiquity, not everyone has access to the same products and opportunities. But cash is simple and universally useful. For that reason at the very least, it will remain an integral part of the UK economy.