By Ron Delnevo, chief executive of the ATM Industry Association (ATMIA)
Figures were published earlier this year showing that, for the first time, card purchases accounted for over half of payments made in the UK. This led some people to argue that the last days of cash are imminent, with Apple Pay providing yet another nail in the coffin.
While the narrative may seem irresistible, such assertions are simply untrue. When you dig a little deeper into the headlines, you find that notes and coins still make up 48% of all UK payments. Furthermore, the Bank of England reports an increase in bank notes in circulation every year, mirroring what the Royal Mint is reporting in relation to coins.
You don’t see many publications pick up on this fact, however, because it doesn’t feed into the journalistic zeitgeist that we’re entering a ‘cashless society’. The reality is that consumers and retailers are not fully buying into the benefits of payment innovations at point of sale.
This is not surprising; such a change imposes significant hardware requirements on both consumers and retailers. For instance, Apple Pay requires up-to-date iPhones and iPads with NFC enabled technology, and transactions are currently limited to £20. For retailers, the correct payment infrastructure has to be installed, which many are reluctant to do with such little demand from customers.
This is backed up by consumer surveys; according to Reuters, the top reasons cited by US retailers for not adopting Apple Pay are lack of customer demand, lack of access to data on the take-up by iPhone users and the cost of implementing contactless technology.
People are also reluctant to give up cash. This is for a variety of reasons, not least because it gives consumers close control of their finances, enabling them to better manage their budgets. Cash is also usually universally accepted, so it can be relied on more than any other payment method, and it does not give consumers any serious concerns around security, data usage and fraud.
Given all this, there is no doubt cash will continue to be popular, and provide a viable alternative to electronic methods of payment. To paraphrase Mark Twain, reports of the death of cash have been greatly exaggerated.