According to a survey carried out in Britain by Lloyds, bank cards and the rise of contactless payments over the past 3 years has led to one quarter of British people believing that they will be able to do completely without notes and coins within 5 years. Only half of the people surveyed believe cash will still be in day to day use in a decade’s time, while 48% believe they will use contactless payment methods every day by 2025.
Of the people surveyed, 39% say they don’t expect they will need to use cash at all a decade from now. Over a quarter of the participants expect to be able to make payments with watches, or other wearable technology and 22% think they will regularly use their fingerprints to make payments. 7% of the participants went as far as to expect that microchips embedded in your body will be used to make purchases.
Meanwhile, Barclaycard has reported that contactless transactions more than doubled over the past 12 months as technology is increasingly being used for everyday transactions. The firm said that 29% of transactions in supermarkets are paid for via contactless system, while 20% of restaurant payments are contactless.
Currently there are too many people who are using cash on a regular basis for it to be abolished totally. It has, however, now become absolutely essential for retail stores to support contactless payment methods. As this becomes more and more used instead of cash, it may be possible that we will start to see retail stores not carry any cash at all. Currently it is only speculation however some countries such as Singapore and the Netherlands are already reported to be over 60% cashless transactions.
An interesting question this raises is whether cashless payment methods encourages more spending. Research conducted by Mastercard on this subject has shown that people will spend more money if the payment method is deemed “easier”. People will spend more when paying with a credit card than they will when they pay with cash, and this trend is continuing as payment solutions get even easier. A study conducted by MasterCard has revealed that consumers can spend as much as 30% more with the new contactless payment methods than they do with a credit card.
This increase in spending is very advantageous for businesses and banks, and the research should serve as an incentive to offer cashless options. Consumers, however, may find that they need to be cautious with these systems and remain conscious of their spending. Luckily, some cashless payment options also make it easier to track spending by offering a variety of convenient ways to check balances at any time.
In the next 10 years it will be interesting to see how the move towards a completely cashless system progresses and the effect it has on retail and consumer behavior.