V4B Business Finance

Are we heading towards a cashless society?

More than a third (37%) of Brits believe the UK will be a cashless society within the next 10 years as card payments continue to increase.

The younger generation are more confident of ditching cash as 53% of 16-34 years olds believe we’ll be reliant on digital and card payments by 2028, according to research from Experian and Gorkana.

Sarah Lewis, head of ID and fraud at Equifax, said: “We’re in the midst of an exciting smart payments revolution. We can pay for our lunch with our watches and passers-by are now able to donate to buskers via contactless. This growth of new payment technologies is drawing us closer to a cashless society, but long-standing preferences for cash remain in certain situations, particularly among older consumers.

“The shift to digital payments in the new economy raises important questions about the role of different payment methods and highlights the need to balance the convenience people want with security. As digital and online payments continue to grow, so too does the associated fraud. It’s vital that new technology is maximised to give people the reassurance they need as they change the way they spend.”

However, the Federation of Small Businesses (FSB) believes it could lead to some businesses losing customers.

Mike Cherry, national chairman at the FSB, said: “The current wave of bank branch and ATM closures are continuing to hit the most vulnerable hardest. Many consumers still want to use cash, which in turn means small firms need to be able to access bank branches and cash deposit facilities.

“But as branches disappear from our towns, villages and high streets, smaller businesses are left with the risk of leaving potentially large sums of money on premises or being forced to travel long distances to reach their nearest bank.

“Despite the rise of online banking, the ability to bank in person is something many still rely on, particularly those up against slow broadband speeds.

“Cash also means reliability – important in the wake of recent high-profile cases of online banking and payment card services failing.

“Half of our members say they’re already a kilometre or more from their nearest cash point, and six in ten in the retail sector say cashpoints are important to the success of their firm.

“Going cashless can be beneficial to some small firms but, for many, being forced to refuse cash will only mean that customers are lost.”

 

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