Will Britain be the next cashless society?
On the day of the ‘old fiver’ ceasing to be legal tender, is this a sign that cash is leaving the British Isles? Probably not.
While the old paper £5 notes, replaced by polymer notes, will cease to be legal tender on 5 April 2017, the Bank of England stated that 150 million of them remain with the public. In addition, during 2016, growth in the value of Bank of England notes was 10%, double its average growth rate over the past decade.
Shops may now refuse them, but consumers can still exchange them at banks for the next few months.
The fact that consumers are holding onto old notes and not exchanging them suggests a lethargic attitude towards cash.
In addition, new research from the PPRO Group suggested that despite the new pound coin introduced into circulation on 28 March 2017, 43% of the UK population are yet to receive one.
59.4% of respondents believed that the UK will be a cashless society soon, 12% believed that this would be within five years time with a startling 4% claiming that money will be obsolete in less than two years time.
One third of the UK state that they never use cash anymore, a figure which rises to 51% among millennials.
However, the UK is hardly likely to become a cashless wonderland. It lacks the trajectory shared by Nordic countries, where cashless seems a true possibility.
According to the PYMNTS Global Cash Index 2016, 48% of transactions in the UK are made in cash. Cash usage is actually expected to grow by 0.61% per year over the next four years.
While electronic and digital payment methods are gaining popularity, they are all competing against each other for presence. Cash is a behemoth standing strong. The 50p coin doesn’t compete with the £20 note, they work in unison.
Cashless UK? We’re more likely to see a new pound coin.