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Cashless Britain - not coming to a town near you soon

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2015/03/04

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  • Tom,
    Whilst we've not done our own survey, most surveys do seem to suggest that cash is "cheaper". The British Retail Consortium and the European Commission (http://ec.europa.eu/competition/sectors/financial.../presentation_results_en.pdf ) studies conclude that point. But I'd also say that there is a perception about a surveys usefulness depends on it's design, and who designed it. Both these are actively being used to say cards are too expensive. I'm not saying that there is a bias, but both sides of the argument have been vocal in claiming that there is. This argument has been going on for at least ten years, and I see no end in sight yet.

  • Jeremy,
    Many thanks for your comments, and unsurprisingly, I'm in violent agreement! I was trying to highlight two points - #1 cash isn't dead, and #2 you can't take the numbers at face value and draw simplistic conclusions.
    Cash *is* declining, and there is no argument there. By value, it was over taken years ago by numerous transaction types. By volume, I don't see cash disappearing in my working lifetime. But it probably will be overtaken.
    Contactless is absolutely growing. I was more pointing out that Oyster may give those not close to the numbers false impression of the growth. My rough estimates also suggest they'll top a billion this year - 400m of that will come from Oyster, 300m from core growth. That's still a very impressive growth. I'd also say that the growth isn't just coming from cash either - some of the volume has switched form factor (i.e. EMV to contactless) for example.

    Gareth

  • I agree, reports of the death of cash have been greatly exaggerated. A leading retailer recently told me that they had carefully measured the cost of different payment types and even when the so-called 'hidden' costs of cash are factored in, it's still the lowest-cost payment method. This is a bitter pill to swallow for someone who's spent his life working in electronic payments! But it does seem that in many sectors, the push for replacement of cash is coming more from those with an alternative to sell than from dissatisfaction of those who use cash today.

  • Gareth

    You should look at the maths. There are about 22bn UK cash txns p.a. (Payments Council data). Assuming payment txns grow in line with GDP, UK cash txns should grow by about 500m txns in 2015. However, contactless txns are growing consistently at 200% - 300% p.a., and have been since long before they started replacing Oyster. This year they could top 1bn txns at this rate. Therefore, when the Payment Council stats come out next year, I expect to see a decline in cash of around 500m txns in 2015 since 2014. Even an unchanged figure would show that cash in the UK is in fact declining.

    Jeremy