The dash from cash

By Liz O'Driscoll | 26 November 2020

The COVID-19 pandemic has sped up the UK’s journey towards a cashless society. In March, ATM withdrawals plummeted by 60%, with more citizens turning online to pay for goods and services. This dash from cash led to UK Finance predicting that cash payments will fall to just 9% of all transactions by 2028.

With new payment technologies making it easier and safer, and the acceleration of cloud adoption fuelling innovation in this area, there are many obvious benefits to going cashless. But research shows that 41% of citizens still currently prefer to pay with cash. So is the move to a completely cashless society, such as Sweden where just 1% of their GDP circulates as cash, a good thing for us and our public services?

Before the pandemic, 7.4m UK citizens confirmed they’re living ‘an almost cashless life’. Many feel the younger generation are driving this, but the older generation are very much part of this lifestyle. Our A Word from the Wise study found that 49% of over-70s have paid their council tax or a fine online, compared to 52% from the wider UK population.

COVID-19 has seen more citizens embrace more cashless payments. This has both helped keep vital services moving, and safeguarded council staff who no longer need to handle cash. For many local authorities, cashless payments have helped improve the user experience. Just like shopping online, citizens can now enjoy a similar eStore experience, browsing and securely paying for services at home or on the move. Increased services, and the ability to pay online, can improve a council’s revenue generation, while efficiencies in collection and processing can help reinvest and support local communities quicker.

But despite all these benefits, a cashless society is not yet suitable for all. With improvements still needed with our mobile and broadband coverage, we shouldn’t forget that 17% of our population still rely on cash every day. Approximately 1.3m adults don’t have a bank account and 72% of citizens feel vulnerable groups would be more likely to be scammed or defrauded in a cashless society. It’s these worries that led to the Financial Ombudsman Service recently saying: ‘If we sleepwalk into a cashless society, millions will be left behind.’

Public services can and are playing a vital role in connecting our communities. Programmes such as “Get Greater Manchester Digital’ – aiming to help improve resident’s digital skills – should be applauded and extended. Outside of upskilling, catering for the more digital savvy citizens can allow more resources and support to be provided to those in need. A hybrid approach, such as Civica’s Mid-call telephone payments solution, helps maintain a human touch while realising the benefits and security of cashless transactions. Councils such as Waltham Forest LBC are using this type of technology to make sure their digital strategy meets the needs of all of their citizens.

The growth of new digital currencies and more innovative payment technologies, such as the Amazon One Palm scanner, will continue to see us moving towards that cashless society. Some technologies will be more relevant than others, but public services should continue to build on their innovative spirit and not be afraid to experiment.

With Civica NorthStar, we’re providing our customers with a safe environment to explore the art of the possible, and harness new thinking. As we look to the future, cashless or otherwise, now is the time to be bolder and enhance public services for everyone.

Liz O’Driscoll is Head of Innovation at Civica

www.civica.com

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