We’re making updates to our systems on Saturday 8th May and some of our CTF and Junior ISA online functionality may be unavailable. Thanks for bearing with us, we’ll be back up and running as soon as we can.

The pandemic pound: Where cashless is more

2020 has been one of those years we won’t forget in a hurry. But with everything that’s happened, could it be the year we become a cashless society?

Is cashless the new normal?

Earlier this year, we asked the question of whether we are ready for a cashless society - paying for everything digitally, via our bank cards, online or on tech such as smartphones. There was a fair argument for either answer.

Fast forward to now, and stats continue to show physical cash transactions are only going down. In 2019, they accounted for just 14.6% of total payment transactions, and are expected to be even lower for 2020.

As the pandemic continues to affect our everyday lives, and our cashless days feel more like the norm, could our question now be answering itself?

We’re fine online

The pandemic has absolutely hammered the retail sector, with over 11 thousand chain store outlets closing in the first half of the year.

Unsurprisingly we’ve headed to their online stores instead. With research earlier this year suggesting a quarter of us brits won’t be going back to the offline shops… that’s a massive 17.2 million people now happy to do all their shopping, and cashless payments, online.

There’s no place like home

The past year has really seen us adapt all aspects of our lives to the confines of our own four walls. Working From Home (WFH) has become the norm for many, and even our social lives have stayed under the same roof.

'In in' has become the new 'out out'. Last month one delivery service alone, reported online food orders had increased almost 50% since March, with 100 million more orders delivered than normal (inc. 150 million pizzas and 42 million curries). As consumers we continue to be flooded with promotional offers, meaning the return to the high streets may be easier said than done… and the need for cash, less so than ever.

We’re watching our pennies

So we’ve seen how the pandemic has clearly affected how and where we spend our money, but it’s also meant we’re now watching them a little differently too…

Hands up, who downloaded their banking app for the first time this year? If you said yes, you’re not alone! Between March and April this year, SIX MILLION other people reportedly did the same!

Why would anyone manage their bank balances from an ATM machine, when they can do it 24/7 from the comfort of their own home!?

It seems a no brainer, and the reason why over half of us are now using banking apps and the like, on a daily basis!

Positive evolution

Obviously it would have been nice to discover our new ways with money under different circumstances, but the pandemic has sped the transition up, bringing with it lots of immediate benefits:

  • Contactless payments - Can help reduce the spread of potentially con-taminated banknotes (according to the World Health Organisation)
  • Good to go - Most new bank cards come with contactless as standard, whilst setting them up on your smartphone is also now easier than ever (just requires a few minutes to verify the card with your bank)
  • Convenience - No more carrying around wallets and purses crammed with cash. It’s also quicker and less fiddly to pay by contactless (and easier to track your spends with online banking too)
  • Increased limits - Contactless cards now allow you to tap and spend up to £45 (previously £35), and smartphones even more (as they’ve added security measures through finger print and face recognition technology).

Although a cashless society has many pros, it would be naive to think it wouldn’t come with some cons too:

  • Access denied - It wouldn’t suit everyone, with over 17% of the UK estimated to struggle (inc. those without internet access, or a bank account)
  • Budgeting blinkered - The value of money could be lost if you can’t physically it, and the temptation to spend beyond your means easily done
  • Charity chopped - Many donations come in the form of spare change, so charities and the homeless could suffer as a result.

To sum things up

Whether you’re for or against, we’ve been heading towards this cashless society for some time now (and you probably didn’t even realise)…! Transport companies have been swaying towards preloaded cards for travel since 2003, whilst almost half of all Premier League football clubs now don’t accept cash payments at their grounds.

We’re not quite a cashless society yet, but as the old adage goes, money talks. With the average contactless payment taking just 2 seconds (compared to 15 seconds for cash)… it could be less a question of if, and more a question of when.

You may be interested in...