This week it was a pleasure to answer some questions from a MA journalism student from the University of Sheffield.
The student is currently working on a project about the impact of society going cashless and was interested to hear more about your experience living completely cashless.
Here is what I said:
1: When did you decide to go completely cashless and what led you to make the switch, was it a gradual thing?
2018 saw the transition towards a cashless society in the UK gather significant pace, supported by a proliferation of new payment options from a wide range of established and ‘start up’ FinTech companies.
As the outgoing CEO of Bacs, the UK’s largest electronic payment system (www.bacs.co.uk) I was already an advocate of cashless payments but still visited ATMs to keep a constant supply of notes in my wallet which seemed a bit strange.
A quote Brett King (author of Bank4.0) captures the challenge I set myself ‘Cash is an inefficient value exchange mechanism in a word driven by digital interaction and commerce, think of it (being cashless) as an upgrade to the 21st Century”. I decided that the way I spent my money needed an upgrade.
In setting my cashless challenge I was intrigued by the subject of payment choice which points to ensuring the transition to a cashless society is both planned and inclusive:
“Consumers should be able to decide for themselves how they pay. For us, it is important to have a broad mix of options and that efficient methods for payment are available” – Burkhard Balz, Bundesbank, Germany
It is my view that the transition to cashless is not a binary argument about ‘cash’ versus ‘cashless’ where one side will emerge a victor. The challenge is, as Balz states, to ensure the UK has a broad mix of efficient options for the consumer to decide how they pay for something (and, I will add, that are inclusive and accessible to all).
Consumer choice is crucial and, for those that want to dispense with notes and coins, a broad range of inclusive cashless payment options are vital if the UK is to become a truly cashless society.
So the challenge I set myself was to see if it is possible to be completely cashless in the UK.
I’ve just completed my first cashless year – you can read of my experience at: http://northeypoint.com/2019/08/24/dont-think-of-it-as-going-cashless-think-of-it-as-an-upgrade-to-the-21st-century/
I’ve proved that being cashless in the UK is not only possible but efficient and convenient.
2: What are the best things about not using cash?
For me, the best thing about being cashless is not having to find and queue up at an ATM to constantly replenish cash in my wallet, in fact I have been able to completely dispense with my wallet.
This is closely followed by not having to deal with coins that I received in my change.
After all, my phone had already become my solution for email, internet, music, banking, navigation, photographs and a whole host of other things so it seemed natural for it to become my wallet as well.
I also asked some of my Cashless Twitter followers what they thought was the best thing about not using cash – this is what they said:
Nigel: ‘Not worrying about going out without a wallet’
Nigel: ‘Not having to handle coins’
Serge: ‘Just connivence and suppose in its many forms – ease, speed, security,space saving, multiple options (phone, watch, card, ring, bracelet, cleanliness, data recording and interrogation)’
Liberty: ‘Not having to make a special trip to the cashpoint’
Ruth: ‘Never having to worry about if I have any with me’
Ann: ‘Being able to go out without a handbag or the bulk of a purse in my pocket’
Jay: ‘It’s safer’
Chris: ‘Not having to carry cash – wallet less’
Rohit: ‘ One less reason to say keep the change’
Andrew: ‘Cash is actually filthy – do a Google search for the amount of germs, drugs and faeces found on cash – you’ll go out of your way not to carry it (and will carry hand sanitiser when you do)’
Sam: ‘Not having to carry cash – not having to remember to go to the ATM (I.e. not worrying about running out of cash)’
Drew: ‘Full accountability for almost every penny spent’
Jonathan: ‘Not having to deal with small coins and quicker’
Chris: ‘Pictures of bacteria and fungi grown from a well used bank note’
Nick: ‘(Cashless) payment is faster’
Jonathan: ‘There are so many but how about ‘control’ in the context of consumers having control over their spending’
Caroline: ‘Saves time on withdrawing cash and you get a lighter wallet’
Joe: ‘Not having to find a cashpoint or taking a wallet’
Liam: ‘Trying to locate a cash point and finding out it doesn’t have any money. I also know that if I forget my wallet I can always pay for things on my phone’
3: Is there anything you’ve been surprised by when not carrying cash? (for example, finding a shop/café in a remote place accepting contactless or a card reader at a marketplace)
The biggest surprise I have had from being cashless is how many people ask me about how I am getting on. I am pleased that my challenge has encouraged some people to become cashless as well and others have decided to become a little bit more cashless.
I’ve had lots of conversations in shops about my vertical Starling Bank (www.starlingbank.co.uk) debit card, the ability to pay contactless with my Apple Watch and having to use TescoPay+ instead of Apple Pay in their stores.
Being cashless has also opened up convenient opportunities to increase giving – a cashless donation is better than a couple of coins thrown in a tin.
Two organisations that I have been following this year are Tap London (www.taplondon.org) and Pennies (www.pennies.org.uk). Both offer innovative solutions to support good causes that reflect an increasingly less-cash or cashless society.
From being cashless in Unst, the most Northerly point in the UK, at the top of the Shetland Islands (http://northeypoint.com/2019/06/18/cashless-in-shetland-the-verdict/) right down to the southern tip of Europe (Lanzarote) the ability to be cashless has been a pleasant surprise.
4: Have you had any difficulties while not carrying cash, such as places being cash only or having a minimum spend?
During the 12 months of my cashless challenge I have not encountered many difficulties.
As each week passed I found easy and convenient solutions to being cashless and any difficulties I encountered very quickly diminished. The final few places to accept cashless payments were dry cleaners, car washes and take always. In almost every case even these final few places have now moved to cashless payments which is fantastic.
A very small number of retailers stipulated a minimum cashless spend so I just shopped elsewhere. That said, I haven’t seen a ‘minimum spend’ sign in a long time.
It is a shame when retailers set their ApplePay limit at £30 (the contactless payment limit in the UK). Most retailers offer ‘limitless’ ApplePay – although one of the UK’s leading supermarkets has yet to increase their £30 limit. Often staff do not know that their POS devices will accept ApplePay payments over £30 so I always try and see if the payment is accepted before I revert to my plastic debit card.
After a year of being cashless I face one final cash based hurdle – not all restaurants allow staff tips to be added to the bill. This is the case in my favourite restaurant so I have to plan in advance if I want to be sure to reward waiting staff.
Oh, and needing a £1 coin to use a supermarket trolley – although this coin is technically just being used as a token not really a payment!
5: Quite a few money charities and campaigns have mentioned cash being a useful tool for budgeting, what would you say to these concerns? Do you think mobile banking apps could be useful for budgeting and management?
It is important that cashless solutions are accessible and inclusive to all in society. Many find cash a useful tool for budgeting but there are cashless solutions that support effective budgeting but there are many tools that would be very helpful for cashless budgeting.
There are many online and App based solutions that help budgeting for example:
Banking apps from Starling and Monzo allow money to be allocated to ‘saving pots’ and both provide spending analysis and category limits set to provider prompts.
Apps like Money Box allow purchases to be ‘rounded up’ to the next pound and the pennies saved into a savings account or ISA.
Money Dashboard syncs with your bank account and analyses what you are spending your money on which can enable you to make savings or different choices if necessary.
6: Another concern around society going cashless is that it can make some groups of people more vulnerable to online scams, do you think this is something that could be solved through better online awareness and financial awareness?
Unfortunately scams are very prevalent in our society and are seen across every aspect of our life, being cash based or cashless will not protect us from these scams.
Increased (online and financial) awareness is crucial – Financial Fraud Action UK are doing an excellent job in this regard with their Take 5 campaign – https://takefive-stopfraud.org.uk
The banks are developing a service called Confirmation of Payee which will give end users of payment systems greater assurance that they are sending their payments to the intended recipient – https://www.wearepay.uk/confirmation-of-payee/
7: What would you say there is an environmental case for going cashless?
There is possibly an environmental case for going cashless as the cost of producing and managing bank notes would disappear but the true benefits of being cashless are elsewhere.
There is an environmental case, however, for making shop receipts digital, paper receipts are largely pointless only end up in the first bin I see so I always decline to accept a receipt in a shop.
But, in addition to an efficiency challenge, there is also a significant environmental angle to this new challenge.
Flux (www.tryflux.com) say:
“Flux envisions a purely digital future for payments and receipts. Right now a staggering 11.2 billion paper receipts are printed in the UK annually and around half of these are non recyclable due to the fact that they are printed on thermal coated paper. That’s almost 200,000 trees that are needlessly felled each year for the sake of receipts. 90% of these receipts are thrown away or go unused and nearly half of us (47%), agree that traditional receipts are a waste of paper. Our mission at Flux is to make paper receipt obsolete and digital ones available to everyone everywhere.
We see Flux being adopted in a similar way to contactless technology, an efficient and useful innovation that eventually becomes the norm. Flux believes customers should be able to pay by card and receive a digital receipt straight into their bank account next to the transaction without any change or friction at the till. Flux launched the Beat the Receipt campaign to call upon consumers and retailers to change how they view paper receipts and so far KFC, Pure, Itsu & EAT. have all joined the campaign to help reduce paper waste across the UK.”
Receipts, rewards and loyalty that live in your banking app and not landfill probably have a greater environmental impact but that would be another subject.
8: Lastly, what advice would you give to people who are open to the idea of a cashless society but also have concerns about it?
The transition to a cashless society must be consumer led not mandated by government, banks, retailers or anyone else.
On this basis the advice I’d give to someone who is open to being cashless but is concerned is simple – ‘be as cashless as you want to be’.
Start with paying bills by Direct Debit, try a few shop purchases with a debit card, try paying the window cleaner by online banking and very soon you’ll find that your visits to a ATM are becoming few and far between!