Tuesday, 1 March 2016

Cash continues to make a splash

Look away now, banks, card schemes and all the other proponents of a cashless society. It seems that notes and coins are not going away just yet. LINK cash withdrawals from UK ATMs in 2015 amounted to a record £128 billion. The total number of cash withdrawals only grew slightly in 2015 (by 0.8%) with the value of these increasing by 2%. The amount cash machine users took out also went up – with the average value rising from £61.25 in 2014 to £61.93 in 2015.

LINK now accounts for around three-quarters of all UK cash withdrawals. John Howells, LINK CEO, comments: “These figures show that cash remains a very important part of our lives here in the UK and is still the most attractive payment option in lots of situations. With the amount of money being withdrawn continuing to increase, it is clear that cash has an important place in our wallets and purses for the foreseeable future.”

I should add that I didn't write this blog with a smug expression on my face, whilst shouting "mwahahahahaha! In your face, stupid banks! You can’t tell us what to do!" I'm a regular contactless and Apple Pay user, although I do also still carry cash in my wallet. But why are my fellow Brits, and indeed many other people around the world, still so reliant on cash when there are loads of new-fangled payment offerings just waiting to make their lives easier?

In a recent blog post, Consult Hyperion’s Dave Birch tackles the issue head on. A self-confessed "archetype for the stereotype in mobile futurists presentations, the person who often leaves the house with a phone but no wallet”, he writes: "Twenty years of mobile payments, twenty years of presentations about mobile payments at MWC, twenty years of pilots and trials and tests and MoUs, twenty years of arguing about SIM vs. embedded vs. SE, twenty years of closed-loop and open-loop and three-party and four-party, and there’s a queue a mile long for the ATM because you can’t use your phone to by a metro ticket or ride the bus into town. Where did it all go wrong?"

He adds: "Why aren't there mobile payments everywhere? In a sane world, as we landed in Barcelona our phones would automatically fire up a Barcelona app that we could use to pay for the trains and taxis, restaurants and hotels. How long would it take for your bank to issue a four day, Barcelona merchant-only token to the handset? Five seconds? Why can’t I pay in-app for my hotel? Here’s what’s gone wrong: we took amazing new technologies (smart cards, mobile phones, biometrics) and used them to emulate some cardboard hack from 1949. Time to scrub off the whiteboard and start again.”

And while we’re at it, let’s call an end to all the ‘a cashless society is nigh’ talk. It isn't. Cash is here to stay. It remains at the top of the payments pile for a good reason. Notes and coins are far from perfect, but the man and the woman in the street like and trust them. Yep, back to the mobile payments drawing board. Maybe in another twenty years, the revolution will be in full swing.


Senior Editor
IBS Intelligence

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