Dirty, plastic money is not the future

Recent weeks have seen a renewed focus on the role of cash in our society. Firstly, there was the announcement from the Bank of England that the future of Sterling could lie in plastic banknotes, designed to 'future-proof' the currency against wear-and-tear and fraud. Then, this week, research revealed that consumers worry about the bacteria on their banknotes – the same research revealed that Euro banknotes and coins contain 26,000 bacteria, while Sterling has 18,200 bacteria, writes Bernhard Lachenmeier

Recent weeks have seen a renewed focus on the role of cash in our society. Firstly, there was the announcement from the Bank of England that the future of Sterling could lie in plastic banknotes, designed to ‘future-proof’ the currency against wear-and-tear and fraud. Then, this week, research revealed that consumers worry about the bacteria on their banknotes – the same research revealed that Euro banknotes and coins contain 26,000 bacteria, while Sterling has 18,200 bacteria, writes Bernhard Lachenmeier

These two news stories illustrate the weaknesses of paper money – not only is it dirty and full of bacteria, but also it lacks durability and is susceptible to fraud.

These and other factors are driving a consumer move away from paper money and towards a cashless future. In the past five to ten years, the way consumers and businesses want to make payments has evolved considerably. Bitcoin’s, for example, have gone for unheard of to the front page.

Convenience, speed and security are the defining features of payments in the modern world – and this represents a notable move away from cash and towards the new and innovative payment channels now available to us, whether these are card, contactless, mobile or online payments. According to the UK Cards Association, UK consumers spent £3.3 billion more using plastic in December 2012 than in December 2011.

What’s more, cashless payments are likely to continue growing in popularity over coming years. The Gen Y customer base, synonymous with freedom of choice and preference for speed, has come of banking age and is increasingly demanding access to innovative payment solutions. Virtual wallets, contactless payments and online payment security are all deemed to be the norm and banks have to meet these expectations in order to ensure customer loyalty.

And it’s not just banks that are catching on to the cashless trend. Merchants are adapting to fit consumer payment preferences – increasing digitalisation and smartphone ubiquity mean that mobile platforms are becoming an increasingly important channel for merchants, who are now offering e-commerce and m-commerce payment channels as standard.

Ultimately, cashless payments are cheaper, faster and safer – not to mention cleaner! Dirty, plastic money is not the future – let’s start following consumer demand and improving our cashless options.