After research last week that suggested cash was still king, a new study published today argues that most people accept that electronic payments will eventually replace coins and notes.
Barclaycard, which produces the first contactless payment systems available on the high street, along with its parent banking company Barclays, has found that one in eight of respondents to its survey don’t carry cash and half of them believe physical money will be obsolete in the future.
The research also found 57 per cent of people refuse to carry around one or two penny coins and that the average wallet contains only £23 in cash.
Banks and retailers would find their operations much easier to manage if all transaction were performed digitally due to the logistical issues surrounding transporting and storing large amounts of cash but a report published by global solutions provider Wincor Nixdorf found 68 per cent of people chose physical money as their favourite way to pay.
In comparison, 32 per cent of those responding to the Barclaycard & Barclays survey said they preferred paying by card and that 17 per cent cite the ability to keep track of their spending as the major benefit of electronic payment – despite 32 per cent saying this was the reason they preferred cash in Wincor Nixdorf’s study.
Although the two studies, conducted over similar time periods, seem to be contradictory both clearly show that retailers must offer a multichannel payment structure to appease all customers.
Dan Wass, Head of Current Accounts and Contactless at Barclays, commented: “Although we are far from becoming a ‘cashless society’, it’s clear from our research that cash is no longer king. Consumers are increasingly less willing to carry large amounts of change around with them and many believe that coins will become obsolete in the future.
“It is clear that shoppers are now looking for alternative methods of payment – such as contactless – which will allow them to avoid spending time fumbling for change in a queue and will take up less space in their wallet.”
Perhaps most alarming for traders is the fact that the research published today shows that 41 per cent of shoppers have walked away from purchases because they did not have enough cash and this trend was even stronger in younger demographics.
A high profile high street retailer which recently moved away from a cash-only system is bakery goods specialist Greggs which began rolling out card payment terminals to all of its stores last month.
Richard Armstrong, Head UK Payment Acceptance at Barclaycard, said : “For retailers, there is a real opportunity to seize the benefits that accepting card payments brings – especially new innovations such as contactless. “Large and small retailers alike can take hold of the opportunity to adapt to consumer preference towards card.”