A new generation of consumers who are regular users of credit and debit cards could mean the end of the road for cash as we increasingly prefer to flex our plastic.Kahn’s statement comes at a time when CardSave has seen business double in the past five years, as a significant number of SMEs accept card payments.
Statistics from the UK Cards Association show that between 2008 and 2011, the number of UK card transactions increased by over 25%.According to a YouGov survey commissioned by CardSave, 74% of the public carries less than £30 in their wallet, while 93% carry a credit or debit card.
The survey found that 57% of people believe that cash will become extinct in the future – 50% predicting that it will happen by 2035 and 36% by 2025.In addition, it also found that 40% of consumers believe that being able to pay for everything by card would make their lives easier.
CardSave has seen an increase in small businesses and sole traders - such as electricians - taking card payments to help boost customer numbers and end the hassle of cash-handling.Devices such as Barclays Pingit mobile payments service is a recent innovation that could also contribute to boosting the cashless society. It allows individuals and sole traders to send and receive money by mobile for free - and enticingly you don’t have to be a Barclays customer to sign up.
It is expected that more payment companies and banks will follow Barclays' initiative and launch competing systems.The CardSave report also states that 30% of people say that they have found themselves inconvenienced in the past year by retailers that do not accept card payments, with as many as 16% of people walking out of a shop without making their intended purchase because the retailer didn’t accept cards.
Kahn believes that is one of the reasons retailers are leaning to accepting card payments.He said: ‘In today's difficult times shopkeepers need to do all that they can to boost their business, which often drives them to accept cards.
‘Taking cards has a positive impact on the business as customers’ spending power is no longer limited to the amount of cash they have in their pocket.’According to CardSave figures, the biggest growth areas in terms of merchants taking card payments have come from hairdressers, fast food restaurants, car servicing, pubs and taxis.
According to Khan, the main factors driving the demise of cash are generational differences and the increase of technology.He says that the under 30 tend to carry and use much less cash than older generations, over time as the younger age group makes up a higher proportion of transactions, cash usage will decline.
He believes that the introduction of payment methods that are quicker and easier to use than cash will have the biggest impact on its demise - and the impact will be felt most within the next five years, when the ability to make electronic payments from smartphones will be prevalent.
Do you think we will be completely cashless in our lifetime?? I can't even bring myself to perform internet banking.... watch this space...........
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