The Decline Of Cash In A Digital AgeMay 12, 2015
The world has entered a digital age and with this age has come the invention of many new innovative and exciting technologies and devices. However, this age has also seen the speedy decline of many things, of which cash is just one example.
Is cash on it’s way out?
A recent survey by ING bank on approximately 15,000 Europeans has shown that these days’ people are much more likely to use a cash alternative when purchasing goods. Analysis by banks on withdrawals from their customers’ current accounts has also shown that out of every £100 spent; only £18.33 accounts for cash.
People have been relying more and more on card payments for years; however, with the introduction of alternative payment options such as PayPal, internet banking and mobile, cash has seen an even steeper decline.
Halifax has been looking into how its customers are utilising the different payment options they have available to them and discovered that not only does cash now account for only a small amount of every £100 spent, but that debit cards only account for £29.36 in every £100 spent.
Halifax reports that faster payments (mobile and internet) has seen a real increase over the last year or so and now accounts for £15.09 in every £100 spent, up from £12.42 in 2013. Even without statistics from banks, it is clear that cash use has diminished but it is interesting to see a further breakdown of the payment method customers are choosing:
Direct debits now account for £20.84 in every £100; standing orders, £7.01 and bill payments for £1.23. The use of cheques has also been steadily declining over the past 10 years, with cheques accounting for only 1 transaction in every 100; however, because they have a relatively high value, it means they still account for a steady £8.14 for every £100 being spent by a Halifax customer.
Trending towards innovation
With the ease and convenience of using contactless bank cards and smart devices to pay for goods, it is no wonder the trend is growing, steadily shifting people away from using cash and cheques, a trend that the Head of Halifax Current Accounts, Nick Young only sees continuing: “The trend away from cash is likely to go on as banks innovate and provide customers with more convenient ways to pay for their goods”.
With more than half of those surveyed by ING stating that they are using cash considerably less than they did a year ago and 84% confirming that they plan to rely on alternative methods over cash throughout the next year, the decline of cash in our digital age is only set to continue.