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When Cash Isn’t King

Cash and cards

It is interesting to see changes in the way we do things on a daily basis due to the Coronavirus.  Will some of these changes stay when we return to the ‘new normal’?

One good example of this is the fact that people are using less cash.  Millions of shoppers since the lockdown in the UK have had to use cards to shop as many retailers are only accepting cards and contactless.  Will these temporary measures designed to help the spread of coronavirus help pave the way for a cashless society?

The use of cash has been gradually declining over the years (according to which is indicated by the use of the Link cash machines plummeting by 60% during the coronavirus outbreak (data from Link’s monthly report)

Previously there were a number of reasons why it was never deemed possible for the UK to go completely cashless.  One of the main stumbling blocks was that it was thought that the older generation were not keen on technology – my Dad aged 86 (I know, a sample of one) has surprised us all with his embracing of new technology during the lockdown. 

Although this photograph will give you an idea on that we haven’t always mastered the camera angle on our FaceTime calls!

During the pandemic banks have had to quickly develop new services for elderly and vulnerable people without digital access, skills or confidence which include:

  • pre-paid cards
  • carer/companion cards
  • cash deliveries to people’s houses.   

All the major banks now have online banking facilities but most of them are built on legacy systems. Typically, they are clunky, not easy for the customers to use and far from intuitive.

There are a few Industry disruptors such as Smile, Starling and more recently Monzo (who now have over 4m users), are best placed to take advantage of people not able or wanting to stand in queues in old fashioned banks to get cash.

It will be interesting to see the industry figures of cash v cards payments post the Covid-19 crisis – I suspect I won’t be using cash anymore and neither will my Dad.