A recent study has shown that there has been a 35% drop in cash transactions in 2020, as only one in six payments is now cash. There are growing numbers of businesses that no longer accept cash payments. Big names like IKEA, Nando’s and Brew Dog no longer accept cash, and many have a strong preference towards card payments. An increase in online shopping has also led to the increased use of cards, but even where cash can be used, for example when ordering take away food, most places prefer card payments and customers are complying.
As well as cash payments, there has been a substantial rise in contactless and mobile payments. It is estimated that contactless payments account for around 27% of all payments, and virtual wallets are growing in popularity, with many online retailers offering one-click purchase options through Apple-Pay, and consumers storing their cards on their phone, paying with a swipe of the phone and a fingerprint to authenticate.
Many industries are using the shift in consumer habits, driven by technology, to move towards a cashless operation. Not using cash is in many ways easier, cheaper, and safer. There are reduced banking costs, no need to physically carry money to a bank, risking being mugged or having it stolen. Premises are often left unoccupied overnight have a lower risk of break in if they don’t have cash lying around, and it is generally easier to keep track of income and outgoings when everything is on a computer automatically.
Over the years, online shopping has grown exponentially, and now accounts for over 30% of total retail sales in the UK, worth in excess of £141 billion (US$180 billion). This has also helped to shift ever closer to a cashless society.
The Gaming Sector
The gaming sector has always looked to keep up with new trends and technology, and the growth in online gaming and virtual video games have heled shift payment options. Many consoles and devices allow players to simply download games, without the need for a physical disk, and pay online using a card of virtual wallet, or even, in some cases, virtual currency.
Online casinos have also played their part in moving towards a cashless gaming industry. Various online casinos welcome payments from debit cards, bank transfers, virtual wallets and some even accept Bitcoin and other crypto currencies.
In many countries such as the UK, online casinos have seen an increase in popularity in recent years with more people opting to play casino games via their mobile phones. By being mobile compatible, many online casinos have seen an increase in the number of new players which has overall contributed to the growth of online payments. Several welcome bonuses and variety of gaming options to suit every player has also helped increase the growth of this market.
The rise of online gaming
In 2020, the online global gaming market generated around US£21 billion, a 21.9% growth on the previous year. It is estimated that there are around 1 billion gamers across the globe, meaning that over 1 in 8 humans on earth play games in some form or other. This is expected to grow to 1.3 billion as soon as 2025.
Most gamers are connected to the internet, and pay for and access their games digitally. In 2018, 83% of games were in digital format. Players want to be able to pick a game, click a button and play. They do not want to have to wait until the shops are open, or go into town to pick a copy up. It is easier to navigate through games that are stored digitally, rather than having to swap game disks in and out of the machine, and it also means that games can be accessed from other devices by simply logging into the account, perfect if visiting friends or if the console is replaced. This is such a massive deal, that the most recent PS5 had a version released without a disk tray, and it has been common not to have CD/DVD trays in laptops for a while now.
Even the trusty board game is helping move towards a cashless society. Board games are inherently social games that cannot be played online, but they are often bought online, meaning paid for by methods other than cash. Expansion packs and replacement parts are also bought online, and board game forums, like BoardGameGeek even have apps to help players. Some board games have also become successful digital games, like Civilisation and even Monopoly!
It is the future, but is it bright?
A move towards a cashless society has been hailed by many as a step in the right direction. It will help stop fraud in many ways, reduce the black market for items and make money laundering more difficult, reducing criminal activity. It makes transactions traceable and more secure, with a proof of purchase even if a receipt is lost, and can be used to build in warranties and insurances. Proponents of the shift feel it is progress and should be encouraged, making it easier for retailers to refuse cash payments, and increase provision or card machines and alternative payment options.
Opponents of the speed of change want additional considerations given to those who rely on cash, who tend to be the more vulnerable in society. Many older people do not have access to technology not the knowledge on how to manage their finances safely online, making them more vulnerable to scams. There are also privacy issues, as every payment is tracked and linked, showing what was bought, by whom, where and when.