The Move Towards A Cashless Society
2 August 2017
It’s an idea that has been floated around the financial services and banking industries for several months now: A cashless society. Many people now pay for things via contactless card payments, through apps on their phone or by using money transfer websites such as PayPal. There is less need than ever to actually carry coins or notes around with you. Purses and wallets are bulging with cards and receipts as opposed to cold, hard cash.
From businesses to consumers, we are choosing to leave the crumpled tenners at home and pay in seconds through a few taps or clicks. This is in spite of the introduction on new plastic £5 notes and a twelve-sided £1 coin.
Technology and IT website Information Age states that in the UK, “£288 million was spent through mobile contactless payments in 2016 with 38 million transactions carried out across the year. This was a 247% increase on the year before, with the most notable lift being from payments made via Android Pay.” They also state that a 51% of Millennials do not use cash at all anymore. This is a surprising figure, and perhaps the fuel for the surge in use of Fintech products amongst this particular generation of consumers.
Already, in Sweden, the government has made plans for a cashless society; one in which the tooth fairy will owe you via PayPal and birthday cards will be full of transaction ID numbers, not fivers. There have been plans formulated for digital currencies to make hard cash redundant. The Danish Central Bank has made plans for a digital-only e-krone. So, with the statistics in the UK suggesting we prefer tech to pennies, will we be following suit?
Digital currencies, such as Bitcoin and Ethereum, are a little shrouded in mystery. They tend to attract less than flattering stereotypes, such as use on the ‘dark web’. However, they may well prove vital in a push towards a cashless society. Recently, there has been massive investment in digital currencies, leading to rapid advances. This is surely set to transform the financial services market – with consumers and business both being affected by any changes.
The Guardian newspaper reports: “Since the start of the year, bitcoin, the world’s biggest cryptocurrency, has almost tripled in value to $2,565. By some estimates, the cryptocurrency business could be worth $5 trillion by 2022. There are now close to 800 cryptocurrencies worth, in total, around $96 billion.”
This surge in value is a sure sign that digital currencies are set to prove a real challenge to traditional cash in hand. With the Millennial generation looking for quicker and more convenient ways to perform many everyday tasks, a further decline in the circulation of actual money may well occur within this decade.
This is a really exciting and interesting time within the financial services and banking markets. With new technology, comes new challenges, but also new opportunities. If you would like to discuss Fintech recruitment or available roles with me, I would happy to chat with you confidentially. Click here to see my contact details.
Written By Shona Preston