What's the Future for Cash
11.06.2019 by Jack H
Thanks to technology, there are now a plethora of different ways to pay for the things that you want and need in life. Debit cards, credit cards, contactless cards, mobile payments, and, most recently, cryptocurrencies. One thing you’re not short on in today’s tech-driven world is choice.
Technology may be opening a world of payment possibilities, but what does it mean for cold, hard cash? How are coins and notes being affected by this shift in payment preferences, and what impact will the electronic transition have on the economy going forward?
Below we explore what the future has in store for cash.
Fear is seeing consumers move towards technology
There are a number of reasons why consumers are moving towards tech-driven payments in their droves. For one, fear of being mugged means fewer people are now carrying coins and notes out with them when they leave home.
What’s more, it is much easier for a person to protect their finances when they carry only a debit or credit card around. If their plastic is stolen and subsequently used, all they need do is call up their bank, tell them what has happened and get the refund they deserve. When a person has, for example, £100 taken from on the street, however, it’s a whole lot harder for them to recoup their losses. Within ten minutes, the money could have been spent by the criminal and, ultimately, be gone forever.
Electronic payments are automated, and that doesn’t bode well for cash
If there’s one thing the world of work values in this day and age, it’s automation. Why would business owners want to pay a myriad of staff members for their services when they can just invest in one piece of tech to do just as good a job?
Automated services being of such high value in today’s world doesn’t bode well for the humble banknote. Fundamentally, electronic payments are equivalent to automation as they require little-to-no human interaction, meaning, should tech-driven transaction grow even bigger in popularity, banks may not feel the need to employ as many staff members.
And what would be sure to follow these staff members out of the door? Coins and notes. Fewer people equals less of a call for physical cash, and more robots will only allow electronic payments to grow from strength to strength.
Physical cash could be replaced by ‘digital cash’
Physical cash being replaced by ‘digital cash’ isn’t likely to happen in the near future, mainly because a viable ‘digital cash’ system has yet to be created, let alone implemented. This switch is, however, very much a realistic possibility somewhere down the line.
If it were to be created and then subsequently adopted into the mainstream transaction process, ‘digital cash’ would be the result of consumers growing tired of a non-democratic and non-sustainable payment system. With the aforementioned rise of technologically-driven payments, questions have already been raised over who exactly controls the financial system. More importantly, questions have been raised over who has access to this system and the billions of bank accounts across the globe that are stored within it.
In short, the more electronic payments grow in popularity (this popularity grows by the day), the more consumers have to rely on private financial institutions when it comes to storing, saving, and accessing their hard earned money. Coins and notes may be generated and controlled by the government, but individual current accounts are the bank’s property. All those little numbers you see on your online banking screen — yep, they’re legally owned by your bank. This being the case has led (and will no doubt continue to lead) to people taking action to get the ownership of their money back, which is where ‘digital cash’ would come into play. This kind of cash would serve the same purpose as physical coins and notes; only red-tape would stop the banks from owning it.
For a safer saving solution, there is currently a massive call for the world’s various governments to issue a digital version of cash. If this idea were to snowball and one day come into fruition, what could possibly stop it from replacing physical cash entirely? Let’s just hope that the Queen’s head (or, more than likely by that point, the King’s head) looks as good digitalised as it does in the physical realm!
Does cash have a future yet…
According to the Bank of England, physical cash has nothing to worry about. They say that there is currently more of it in circulation than ever before — 70 billion pounds worth, to be precise, which is double the amount that was in circulation in 2009. The BoE also states that the amount of cash currently in circulation equates to £1000 per person in England. Make your own mind up on whether or not you think that particular statement is true, but the overall numbers don’t appear to be lying. Cash does, in fact, still have a stronghold in the financial system, and that has been proven in recent times by the switch from paper to polymer. Why would the BoE create banknotes that are harder to counterfeit and more resistant to dirt if they didn’t think they had much of a future?
What also cannot be denied is that, in general terms, despite the rise of tech-driven payments, people are still managing to make use of cash in their daily lives. This won’t come as a shock. Cash is a fast and convenient form of payment, it is accepted widely across the globe, and it can prove incredibly useful with regards to budget management. It appears, then, that both the numbers and the facts all add up to one thing: cash may indeed have a future yet.
Now that you’ve read all of the above, you can make your own decision on what you think the long-term future has in store for cash. For the foreseeable future, however, it’s probably best to hang onto all of those coins and banknotes you’ve been saving up in your piggy bank, as cash isn’t dead just yet.