Earlier this year, Busk in London — a city-wide initiative to boost and support the work of street musicians — launched a platform for the street artists to take card payments via an app. It would enable donations without disturbing a performance. Charlotte Campbell, a full-time busker who helped trial the technology, pointed to the boost in contributions she was already receiving. “Often, when one person does, another follows,” she said at the time.
Just as elsewhere in the world, innovations such as these have proved to be a major boost in the use of cards — and the reduction in the use of cash — in the U.K.
In 2017, for the first time ever, debit card payments overtook cash, as the use of cash declined by 15% in a year. According to the body UK Finance, there were 3.4 million consumers in the U.K. who barely used any cash at all in 2017. In 2016-17, the Royal Mint, which makes Britain’s coins, halved the production of 1 and 2 pence coins, and the Bank of England has reignited debate on demonetising those coins — pointing partly to the shift in payments from cash to cards.
Now, some businesses are going a step further — getting rid of the use of cash altogether. They include Browns of Brockley, a southeast London coffee shop, whose owner Ross Brown decided to stop accepting cash payments two years ago. “I got to the point where 80% of transactions were in cards, when 10 years ago, they had almost all been in cash,” he said. “Things were changing dramatically and we were responding to that.”
He hasn’t looked back since. While the cost of using cards has dropped substantially (to around 1% of the value of transactions), being cashless has other benefits too. For example, the shop was burgled soon after it moved to being cashless, though all the goods stolen were insured ones and were swiftly replaced. The loss of the local bank branch has been less of a hassle for them than it would otherwise have been if they still operated in cash. He also believes that the signal it sends — that all the shop’s income is declared and traceable — is in tune with his values. “I am happy and proud to pay our taxes and do things properly.”
Numerous advantages
GoCashless, a campaign group to promote Britain turning into a cashless society by 2020, pointed to the numerous advantages. They believe that it would make elderly people less likely to be duped by unscrupulous tradespeople knocking at their door (currently a considerable problem in the U.K.), while it would also hit the drugs and firearms trade, with knock on effects for police budgets and the NHS. They point to the example of the scrap metal trade, which under legislation went cashless in 2012 as part of an effort to disincentivise metal thieves and dodgy dealers. The result was a noticeable drop in the theft of metal road signs, the group notes.
However, not all are convinced that the elimination of cash entirely is the right way ahead for the country. Access to Cash, an independent review published earlier this month, warned that Britain was in danger of “sleepwalking” to being a cashless society, driven by technology as well as less positive factors such as the decline in rural cash machines and bank branches. This will make it hard for the elderly and vulnerable, in particular, to access cash, said the review. Another report by a consumer group warned earlier this year that more than three-quarters of consumers in the two lowest income groups relied on cash, with 26% never using card payments. The move could also leave the vulnerable and elderly more vulnerable to exploitation given the loss of control it could lead to.
Vidya Ram works for The Hindu and is based in London.