Could we be a cashless society within a decade?

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Five out of every six payments are now cashless – what does this mean for finance professionals and businesses?

When future historians look back at the early 21st century and pinpoint exactly when physical currency lost its importance, they will most likely conclude Covid-19 slammed the final nail in the coffin for this material financial exchange that has existed for 100,000 years. 

Cashless payments were already rising rapidly before the pandemic, but Covid-19 catapulted its usage into a new stratosphere. The shift to online shopping during the lockdowns, an increase in the contactless upper limit to £100, plus fears of virus transmission (since discredited) have created a situation where today only one in six payments uses cash (compared with half of all transactions in 2011).

Nowadays,  13.7m of us lead a ‘cashless life’ – double the number in 2019, according to industry body UK Finance. Some predict cash could account for just 6% of transactions within a decade.

“Covid-19 has accelerated the adoption of digital payments by around three to four years,” says Jonathan Westley, chief data officer at credit reference agency Experian. “For businesses, it’s a cheaper way of operating and therefore serving the customer.” 

More business, lower costs 

Certainly, the business argument for cashless is compelling. One of its biggest boons is that it reduces costs – operating fewer tills means organisations don’t need to shell out for equipment, premises or staff. 

Graham Mott, Director of Strategy at national ATM network Link, gives the example of Apple stores, which run by “ripping out physical infrastructure, replacing it with iPads that process scan-and-go payments.” 

Cashless operation also allows businesses to process more payments. Think about your local pub on a busy Friday night. Instead of bartenders fumbling with banknotes and counting loose change, customers simply wave their contactless card, and staff can swiftly move on.  

Less data entry 

For bookkeepers and accountants, cashless means less time spent on data entry or manually reconciling cash transactions. By integrating third-party apps such as Stripe with Xero or QuickBooks, compliance becomes more streamlined and accurate, giving finance teams more time to analyse datasets of the digital payments their customers have made. 

As digital payment and online transactions become more interconnected, real-time information will become the norm in finance departments.

Greater insight 

Using advanced analytics tools, this archived payment data can give brands a real-time overview of their finances, allowing them to forecast cash flows or assess whether an increase in profit margins is needed. 

It also gives them insight into customers’ purchasing habits, which can inform decisions about what products to sell, or offer more targeted adverts and personalised offers. 

“It allows businesses to create new relationships with customers,” says Experian’s Chief Data Officer Jonathan Westley.  

Time to jump on board?

For most businesses, it seems inevitable most transactions will take place in the digisphere. For those organisations yet to update their systems, now is the time to act.  

“If you don’t move, you’ll be left behind and risk ostracising 80-90% of your customer base,” warns Westley. 

Even so, reports of cash’s demise are exaggerated – a blanket ban is unlikely to happen in any country, as people will probably resort to another physical commodity to replace it. 

As we inch closer towards a cashless society, not everyone feels enthusiastic about the demise of physical currency.

As the cost-of-living crisis bites, a recent survey found 42% of people prefer cash because it allows them to budget more effectively. This is what behavioural economists call the psychological “pain of payment” – the tangibility of cash means we notice it when it’s gone, rather than subscriptions or in-app purchases which exit our bank accounts almost invisibly. 

“Cash is a great way of budgeting – you can’t spend money you haven’t got,” says Mott. “If you’re on a tight budget, it prevents you from being overdrawn and accumulating bank charges. Many find it useful because they can count out the money for what they need to spend that week on rent or food, which is easier than analysing spending on a smartphone or bank statement.” 

Such factors have fed into the Government’s plans to introduce a Financial Services and Markets bill, aiming to preserve cash by ensuring “continued access to withdrawal and deposit facilities”. 

Privacy concerns 

With our every financial transaction recorded by banks or payment firms, privacy campaigners have raised concerns about how this data will be harvested. Cash is also anonymous, which for some people, such as those suffering domestic abuse (see box, right), is safer than digital payment trails appearing in their bank account. 

Still, as cashless advocates argue, digital audit trails can help prevent all manner of crimes: money laundering, bank heists, tax evasion (reducing the £32bn tax gap is one of the reasons why HMRC is pushing Making Tax Digital) or making lone shopkeepers feel less nervous about locking up tills late at night.  

Cents and sensibility: The five million ‘left behind’ 

Whatever the virtues of digital payments, around five million people risk being ‘left behind’ in a cashless society. They include the following groups: 

Those without a bank account 

Around 1.3m adults in the UK don’t have a bank account, according to the Financial Conduct Authority. This includes those with a poor credit history, digital refuseniks, people mistrustful of the banking system, or refugees unable to open an account without a fixed address. 

The elderly  

Only 18% of over-64-year-olds have home internet access, while just one in five over-75s own a smartphone – charities such as Age UK argue they’d be disenfranchised by a cashless culture. 

Small business owners, gig economy workers and freelancers 

In 2019, research from Accenture found 80% of people in the UK pay small business owners such as taxi drivers, window-cleaners and gardeners with notes and coins. However, digital payment systems may not always be beneficial – smaller retailers usually pay high transaction fees whenever their customers use contactless payments. 

People with accessibility issues 

Paper banknotes and coins are recognisable for visually-impaired people, who can find digital displays for card/contactless payments difficult to read. Meanwhile, those with learning disabilities may only understand arithmetic for cash, rather than digital payments. 

Those living in rural areas 

The shift to cashless has raised fears people living in remote locations may no longer access cash when unprofitable ATMs are closed. To combat this, Link has a financial inclusion programme subsidising cash machines in rural areas. 

Victims of domestic abuse 

Sufferers of domestic violence often collect emergency cash unbeknownst to their abusers, who often monitor their bank transactions and restrict their access to credit and debit cards.  

This cash could prove indispensable should they get the opportunity to flee to safety. 


Scrapping coins for contactless payments would damage smaller charities that rely on bucket collections, as small change accounts for most donations, according to the Charity Finance Group. 

Christian Koch is an award-winning journalist/editor who has written for the Evening Standard, Sunday Times, Guardian, Telegraph, The Independent, Q, The Face and Metro. He's also written about business for Accounting Technician, 20 and Director, where he is contributing editor.

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