Making a contactless payment with a phone
28 June 2021

Are we moving towards a cashless society in the near future?

28 June 2021

Nearly three-quarters (71%) of us think the UK is moving towards a cashless society, according to a new survey. And one in three think this will happen in the next five years, the research from Paragon Bank found.

Cash use nosedived last year during the pandemic – with recent figures from trade association UK Finance showing cash payments plunged by 35% last year, with 6.1 billion transactions recorded.

While coins and banknotes were used for 17% of all payments in the UK last year, 27% of payments were contactless.

However, there are still reasons to believe cash will be around for the foreseeable future.

The UK Government has said it intends to legislate to protect the future of cash, and there are various industry initiatives taking place to make sure people will continue to have free access to coins and banknotes.

Paragon Bank’s survey of 2,000 people also found that two-thirds said they used cash less during lockdown than before – and many thought the shift would be permanent.

One in five were using cash less frequently due to technological advances making it easy to pay for goods using smart devices, including phones and watches.

The demise of cash may also have a knock-on effect for wallets, with a quarter (25%) of people now choosing to carry a purse or wallet either never or only occasionally. Only 13% anticipated returning to pre-pandemic spending behaviours.

However, only one in four (26%) people would see a move towards a cashless society as positive, while one in three (34%) view it as negative.

Many people were concerned about depending more on IT systems – although some thought having less cash around could potentially reduce incidents of violent crime, the research found.

Plus, while contactless technology may be very convenient for many, it’s important to remember it may not be accessible for some people, who will still reply on cash.

Derek Sprawling, savings director at Paragon Bank, says: “The concerns people have voiced about the impact of going cashless are very real factors that reflect that cash currently plays a vital role in communities. This has definitely also been highlighted during the pandemic – any move away from cash will likely be very gradual, and must be carefully managed to ensure no groups are negatively impacted.”

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