What A Cashless Society Could Mean For The Future
With the growth of contactless payment systems, the spread of mobile technology and the establishment of Open Banking catalyzing faster development of digital payment infrastructure, use of cash is slowing. In the UK, only 34 per cent of payments are now made in cash, according to UK Finance, and debit cards overtook cash as the most popular payment method for the first time in 2017. Meanwhile, in Sweden, cash accounts for just two per cent of the value of all transactions and is predicted to account for just half a per cent by 2020.
There will come a point at which the cost of maintaining the infrastructure to support cash transactions is no longer affordable, leading to an acceleration in transition towards digital payment methods. Experts are warning that rising bank charges and disappearing branches will force businesses to ditch cash before customers are ready. A recent report from Access to Cash warns that going cashless too soon could mean millions of people are financially excluded and at risk of exploitation. This emphasizes the need for banks, governments and FinTech companies to work together to ensure that the most vulnerable, the underbanked and the elderly are protected, and that the transition to a cashless society is as smooth as possible.