Will cash ever be king for consumers again?
4 min read
11 June 2019
Cash is no longer king in consumer life. Cards offer users more flexibility, but are they empowering? Whatever method is used, businesses must remember that it's the payment that matters most.
There was a time when cash was king in the plumbing trade. People received their wages once a week neatly folded inside a brown envelope, postal orders and cheques were still in widespread use and wallets bulged with paper notes.
This all might sound a little old-fashioned. But I believe there continues to be a place for cash in the business world. After all, there are still people out there who rely on cash and would be disadvantaged if it was phased out.
I’m not alone in this view, The European Central Bank believes everyone has the right to choose their payment option, and that includes cash.
The dawn of a cashless society – why it’s already here
Cash helps people stay within their budget and it’s well-documented that it’s easier for people to overspend when using a card. However, card payments overtook cash payments for the first time in 2017.
But according to banking trade body UK Finance, cash isn’t set to disappear but will play a diminishing role.
The way we use cash may change, (with more smaller value payments), and it’s estimated that within a decade, fewer than one in ten transactions will be made using notes and coins.
Meanwhile, five million people are currently managing to live an almost cashless existence as the flexibility of our plastic friends grow and the necessary technology rolls out across the land.
Consumers are being penalised by big companies if they use cash
Debit cards account for 15 billion transactions and it’s expected they will be used to make half of all payments by 2024. These days, some banks and businesses are even penalising those who remain loyal to cash.
Free ATM machines are reduced, and the talk is of imposing fees in future on those that remain.
Meanwhile, energy companies are being criticised for over-charging customers an average £87 for those who would rather settle their bill with cash as opposed to direct debit.
Should we become a cashless society?
There are advantages and disadvantages to becoming a cashless society. Those against point to the transaction fees imposed on businesses for card purchases and the need to beef up security surrounding electronic payments. After all, there’s nothing more embarrassing than having your customers’ banking details being lifted!
Those in favour say it will make armed robbery a thing of the past and will help businesses anticipate the needs of their customer by analysing spending habits.
As we all know, the thieves are already finding more lucrative opportunities in digital crime and many have concerns about their privacy and exactly who has access to their personal data.
After all, you’d imagine that the US Government and military have reasonable levels of security, but that didn’t stop Julian Assange getting his hands on thousands of classified documents and making them public!
Cash or card, it’s the payment for your business that counts…
I believe in making it an easy experience for the customer to pay, which is why all my tradespeople carry card machines.
The world is moving on and those businesses which fail to move with it could end up losing business, especially as customers begin to expect to be able to use contactless facilities and card terminals.
We’re all in business to make money and whatever form the payment comes; it should be warmly accepted.
As a businessman, I welcome customers paying me by whatever legal method they wish to, as long as it’s not in cabbages!