Is the world falling out of love with cash?
Remember the days when we’d look for cash machines, also known as any time money (ATM) machines, just so we could withdraw money to make small transactions?
Even though many small merchants and shops accepted cards, people always felt uncomfortable pulling out a credit or debit card to pay for some milk and bread.
However, in the past year or so, there’s been a rapid shift — especially with the rise of digital payment methods. Studies and trends suggest that the world is falling out of love with cash and choosing to pay via credit and debit cards and mobile app-based wallets among other things.
Link, the UK’s largest ATM network operator, recently said that it is getting rid of free-to-use cash machines as demand has declined. The company is removing 250 machines every month on average, with 1,300 ATMs removed between March and July. It’s the first time in 20 years that the company has seen a downward trend in demand.
Further, with ATM scams on the rise, people seem to be avoiding ATMs in order to keep their accounts protected and in order.
According to a recent alert issued by the FBI, cybercriminals are planning to conduct a global ATM cash-out scheme in the coming days, likely associated with an unknown card issuer breach and commonly referred to as an ‘unlimited operation’.
The Guardian revealed that debit card payments have overtaken cash as the most popular form of payment in the UK for the first time. Consumers in the UK used their debit cards 13.2 billion times last year, up 14 percent compared to 2016, according to a report by the trade body for the UK banking and financial services sector.
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The number of cash transactions fell by 15 percent to 13.1 billion transactions in the same period. It’s interesting to note that the use of contactless payment cards almost doubled to 5.6 billion transactions.
Sixty-three percent of people in the UK now use contactless payments, which were first introduced a decade ago but were not initially popular. About 3.4 million people avoided cash completely.
US residents feel the same way about cash. CNBC recently quoted a survey that asked 2,000 people about their spending habits:
Fifty percent of respondents said they carried cash with them less than half of the time they are out. When they do carry it, 76 percent said they keep less than US$50 on hand and nearly half said they keep less than US$20. About 46 percent said they use cash less than eight days each month and 5 percent said they never use it.
On the street, the simple truth is, it’s easier to get things done without cash today than it was a year ago.
In essence, the slow shift towards a cashless society is being driven by payment solutions providers — especially fintech businesses such as Venmo and Alipay — getting more vendors (shops and restaurants) onboard. The future, however, depends on making sure everyone accepts a form of payment that is universal, therefore ensuring a smoother yet quicker shift.