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What does a Cashless Future Mean for Retailers and Shoppers


The ongoing COVID pandemic has driven a huge surge in online, digital transactions as people avoid shops and rely on home deliveries to get what they need. This has renewed discussion and speculation over the future of cash and whether a global, cashless economy will emerge any time soon.

The COVID-19 pandemic has seen around $5 trillion in global retail sales shift from offline to online. Previously, in Europe, around 47% of retail sales were transacted in cash. Millions of consumers and many thousands of vendors have now quickly adapted to the use of online payment systems resulting in an accelerated decline in the use of cash.

Digitalisation and the use of technology is changing how we work, how we interact and how we fulfil our routine consumption habits. While not so long ago cash was the most effective ways to make an immediate purchase we are now very familiar with a variety of payment options including digital bank transfers, payment cards, contactless payments and software applications on our smartphones and tablets.

What are Cashless Payment Systems?

Just to be absolutely clear, a cashless payment system refers to any type of payment that doesn’t involve hard cash. As noted, bank transfers, debit cards, credit cards and digital wallets are all examples of cashless payment techniques.

Consumers and most businesses are very familiar with the use of credit and debit cards for cashless payments. Shoppers provide their credit or debit cards and their transactions are conducted electronically with no cash involved.

Contactless payments are a specific form of cashless transaction in which there is no need for physical contact between a consumer’s card and a vendor’s POS (point of sale) system. Contactless systems use NFC (near field communication) technology to interact with a customer’s card when its held within about 10 centimetres of the payment reader device. This form of cashless payment has become very popular with hygiene conscious shoppers and businesses during the COVID pandemic as it significantly reduces the potential for indirect contact between consumers and shop staff.

The increased demand for minimal contact spending capability has prompted the UK government to raise the tap-and-go spending limit. Firstly, this was increased from £30 to £45 in 2020 and this limit was elevated further to £100 in October 2021.

cashless payment channels
Cashless Payment Options


Digital wallets, or e-wallets, refer to apps which securely store people’s payment and security information for multiple payment methods, banks and websites. Digital wallets, in conjunction with mobile payment systems, work very much like contactless cards. They rely on the use of NFC, enabling customers to securely complete transactions using their smartphone devices. Digital wallets are also used to hold digital coupons and customer loyalty card information. Examples include Google Pay, Apple Pay and Samsung Pay.

Cashless Payment Pros and Cons

Many businesses that previously relied upon cash based customer transactions have accelerated their adoption of cashless payment capabilities. There`s a much wider selection of card payment machines available today than ever before including portable, contactless payment machines, ideal for small businesses. Any vendor failing to provide customers with hygienic, safe, secure payment options will be losing valuable business to others who have moved with the times.

Consumer Demand

Consumer demand reflects how cashless payment capability is what customers want. A recent survey conducted by Mastercard showed that almost 50% of the British public carry under £5 in cash. Notably, around 27% of shoppers stated that they have chosen not to buy something from a shop which didn’t offer cashless payment facilities.

Fast Transactions

Cashless transactions are completed far faster and with much less fuss than cash payments. There’s generally no need for customers to queue while till operators deal with cash payments which take much longer to process.

Error Free Payments

An important aspect of cashless payment systems is they are inherently accurate. The potential for human error in the transaction is largely removed by the system that ensures the transaction is accurately recorded and the customer’s card or account is correctly debited. No need to handle and count cash and no need for change.

Safety and Security

Cashless payment systems significantly enhance the security of cash and the safety of staff. Since tills no longer contain much cash they become far less appealing targets for criminals making the working lives of till operators much safer and reducing risks for retailers.

cash in till
Reduced Need for Cash


Data Security

While cashless payment systems provide many advantages for both consumers and retailers there are a number of potential disadvantages. Data security concerns are high on the list.

Unlike cash payments, digital transactions aren’t anonymous. This raises data security and privacy concerns for which rigorous security systems and processes need to be in place to protect customer data.

Hacking and cyber attacks are an important aspect of digital security. The progressive move toward increased use of digital technologies has been paralleled by a massive growth in cyber attacks. Hackers are effectively modern-day bank robbers, highwaymen and muggers. Robust security systems and high levels of vigilance from businesses and consumers are needed to avoid becoming crime victims.

Reliance on Technology

While digital systems can improve efficiencies and help avoid costly human errors we all know how problems can arise when technology breaks down. A system malfunction or poorly implemented software update can potentially make it impossible for a vendor to accept cashless payments.

Many People are Non-Digital

The accelerated use of digital payment technologies during the COVID pandemic has starkly highlighted the UK’s digital divide. While the number of internet non-users (people who have either never used the internet or have not used it in the last three months) has declined by almost 50% since 2011, in 2018 there were still 5.3 million adults (around 10% of the UK population) who would fall into this category and they aren`t all elderly. 

Cash Handling Challenges

Historically, retailers will be very familiar with cash handling processes and the challenges involved. Till systems through which cash purchases are processed generally use a ‘float’ to provide customers with change. Sales will often be recorded to an electronic system and customers are provided with printed receipts recording their transactions.

At the end of the business day tills will be ‘cashed up’. Cash in the tills is counted and compared with recorded sales. Cash from multiple tills must then be securely collected and transferred to a safe, secure storage location before eventually being taken to the bank.

Retail environments offering cashless payment options reduce the amount of cash they need to process and store securely. They also reduce their cash handling responsibilities. The Bank of England reports that the amount of cash withdrawn from ATM machines significantly declined as a result of the COVID-19 pandemic, reflecting the move toward increased use of digital payment channels.

While the amount of cash being handled by retailers is falling its important to remain aware of both the high number of non-digital shoppers and the convenience of cash. It may be argued that the COVID pandemic has demonstrated that cash is no longer king, but its not about to disappear. Retailers will therefore continue to need secure cash transfer processes, cash bags, cash-in-transit boxes and secure cash safes.

cash bags
Cash Bags for Secure Cash Handling

What Does a Cashless Future Mean?

Hong Kong is quickly heading toward an almost entirely cashless society with one payment processor predicting that paper money and coins will account for no more than 1.6% of point-of-sale (POS) transactions by 2024.

The burgeoning e-commerce marketplace is, in part, responsible for this massive change. Its also noteworthy that while the most popular online payment option in 2019 was via credit card, digital wallets are set to take over by 2024.

Globally, its widely agreed that the move away from cash-based systems will benefit businesses and governments by supporting economic growth, providing more jobs, increasing wages, boosting productivity and reducing crime.

But we are unlikely to see cash entirely eradicated any time soon. Retailers will need to remain highly aware of trends and the desires of their customers. They need to offer all of the payment facilities their customers desire while at the same time not putting-off those who don’t want to go digital or don’t trust digital systems.

Consumers need to be aware of the various payment options available to them, including digital wallets. They also need to be capable of establishing and maintaining secure accounts with strong passwords using two-factor authentication.

Its likely that over the forthcoming few years we will see radical changes in how transactions are paid for, how money is handled and the evolution of digital currencies.

If you have any questions about cash handling or if you have any special requirements remember that we are here to help. Give us a call on 01273 475500 and we’ll provide you with free, expert advice.

This message was added on Thursday 16th December 2021

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