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Will cash always be king, or has it had its day?

The days of writing out cheques are quickly becoming a fading memory for most of us and a generation is growing up in a cheque-less society. As more consumers come armed with a smartphone, transactions are happening seamlessly through mobile banking. Many younger consumers, in particular, have come to expect that mobile and contactless payment options are available for many of their purchases. With so many financial and technological advances, it begs the question of whether we’re on the way to becoming a cashless society, too.

The gold standard

Cash has long been the gold standard against which all other payment methods are judged. It is considered straightforward, accepted everywhere, and easy to understand. However, it is not without its faults.

One big problem with cash is that it is not secure. If you drop a £20 note on the ground, there’s nothing you can do to protect that money. You can’t ring the Bank of England to cancel that note and have a new one reissued to you. Once cash is gone, it’s gone. This also leads to people feeling less secure when carrying cash, knowing that they might be prime targets for thieves.

Another problem is that cash is bulky. As more consumers streamline their gadgets, there’s a desire to carry less around on a daily basis. While we carry our phone, entertainment and more all in a single device, cash makes us lose pocket or handbag space. What’s more, there’s always the lingering concern of a stray coin cracking a fragile and expensive smartphone touchscreen.

More convenient options

While cash still reigns supreme for a lot of us, there are other payment options that are fast becoming more appealing. In fact, a recent survey showed that 2 out of 5 consumers are carrying little or no cash with them on a daily basis. Card acceptance is becoming ubiquitous, particularly in large cities. In London, for instance, buses are cash free. Riders must have a travelcard or a contactless payment card in order to travel.

In a global market, card payments make transactions easier. There’s no need to switch to a different currency at the border. Many card issuers offer a favourable exchange rate, without the hassle of finding a bureau de change for each new currency.

The technology behind transactions is also speeding up. With internet-connected mobile phones becoming the norm, there’s less of a need to have a traditional card terminal to accept non-cash payments. Mobile bank transfers and even card acceptance is possible with most smartphones.

For consumers, one of the most convenient developments is contactless payments. For transactions under £20, contactless payments make the process quick and easy for both buyer and seller. The development of wearable payments, such as gloves with an embedded contactless payment chip, is also set to make purchases quicker and easier.

Contactless payment technology, such as that being created by Barclaycard, offers a secure way to make the types of transactions that have long been considered cash only. From grabbing a latte to hopping on the bus, the ability to safely transfer money is certainly going to get us closer to being a cashless society.

This was posted in Bdaily's Members' News section by Barclays Bank PLC .