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Q & A
by news stories that claim cash is now an outdated method of pay and I find the prediction of an impending contactless society particularly questionable given that cash still accounts for 48% of all transactions in the UK, as the Payments Council has recently conceded.
Moreover, as OnePoll’s survey of consumer behaviour highlights, consumers are still skeptical of newer technological payments and this suggests that they are not blindly accepting the ‘contactless campaign’. Unlike contactless pay, the success of cash rests not on advertising campaigns but upon the fact that it is a tried-and-tested transaction method. This is why it is the preferred method of pay for 65% of the public, according to the Co-operatives’ own report. I cannot foresee any sponsored advertisement campaign that would be able to drown out this message.
IBS Journal: What does the future hold for cash and the ATMs market?
EO: In a world of ever advancing technology, the growth of digital payment methods is inevitable and undeniable. This development is certainly going to change the face of the transaction industry as a whole, and will impact upon cash and the ATMs market.
However, the Royal Mint was entirely correct when it defended cash against the Co-operative supermarket’s speculation that mobile payments will take over cash and card within the next decade. As the Mint pointed out, global demand for coins is still healthy. To say that cash is at risk of becoming extinct is a very bold statement indeed.
As the Co-Operative’s report on consumer behaviour alluded, cash still accounts for almost half of all payments within the UK and the volume of cash is increasing annually, with the equivalent of £1,000 notes
for every UK citizen. Furthermore, in March 2016, the same month that contactless spending reached £1.5 billion in the UK, the LINK ATM network reported that its cash withdrawals for 2015 reached new highs of £128 billion.
A surge in the number of free-to-use cash machines is increasing accessibility, something we have experienced firsthand at YourCash. Free-to-use ATMs now account for 75% of the total cash machine estate across the UK, Netherlands, Belgium and Ireland. Moreover, ShopperVisa has recently reported that over 70% of customers expect an ATM service in their local convenience store and YourCash has calculated that, in a store that operates seven days a week, this increases total expenditure by £6,700; great news for shop owners looking to increase footfall.
In addition to the benefits for retail stores and small businesses, cash is convenient, simple to use, instantaneous and easy to access. There is no denying that it bypasses all the hassle of rejected cards, bounced cheques and transaction fees. It is also a successful budgeting mechanism during times of economic uncertainty. As a liquid asset it can help consumers, small businesses and entrepreneurs to stay in the game during a crisis, when kept in reserve. Consequently, use has been steadily increasing since the global financial crisis of 2008.
Despite my belief that cash is a staple in our economy, I am not naïve enough to think that the onset of alternative payment methods won’t encourage a decline in usage over the next 10 years. However, consumer choice is vital to the transaction market and our research indicates that cash, much like the humble book (which was of course threatened by the Kindle) will always remain. I am therefore optimistic that the future is bright for cash and the ATMs market.
www.ibsintelligence.com © IBS Intelligence 2016
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