Forget Cashless – should we be focusing on establishing a Cardless society?

Forget Cashless – should we be focusing on establishing a Cardless society?

Lydia Coyle
by Lydia Coyle

Creating a cashless society has been a frequent topic of discussion over the past few years, understandably so with the use of cash decreasing year on year, reaching an all-time low before the pandemic. Cash represented only 23% of all payments in 2019 down from 48% in 2014. The downward trend in the use of cash unsurprisingly has only been exacerbated by the pandemic, but with it an uptake and increase in the use of physical cards. Alongside this has been a rise in mobile payments, a market that was valued at $1139.43 billion in 2019 and set to increase year on year.

This change in behaviour moving away from cash to cards to mobile, begs the questions:

Why should we become cardless? What’s the problem with physical cards?

Why should we not focus on going cashless? What are the dangers of going fully cashless?

We have the potential to be cardless today, so why aren’t we?

There are already a number of exciting solutions in the virtual card space:

Where do we go from here?

With a quick and easy set-up, clear incentive, outlined value and a few innovative banks in the market leading the way, a move from physical cards to virtual ones could potentially happen at pace.

For those people that currently rely on physical cards, the majority have mobile phones, so removing the card isn’t really hindering anyone in this segment of society. However, the proportion of the population that is cash reliant may not have an alternative and would be negatively impacted. It seems therefore that cash will always maintain some relevance, whereas cards could be deemed obsolete.

China is paving the way for making a cardless society a reality, becoming the first mobile-first nation. It has the world’s largest mobile payment market and is also a leader in peer-to-peer payments, by which people are able to pay each other by text. Mobile payments have been so successful in China because they are fast, straightforward and underpinned by technologies such as QR codes that are yet to be universally embraced elsewhere.

With China and other countries showing that a cardless, mobile first society is possible we are left with numerous open questions:

Will the UK follow a similar trajectory and become a cardless, mobile first nation?

What needs to happen to make this a reality?

Do we want to be a cashless, cardless society?

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