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Are we heading towards a cash free economy?

The COVID-19 pandemic has had a significant impact on the way we pay for things.

I’ve been wondering if cash will die out and be replaced by debit/credit cards and online currencies like Bitcoin, and if we need to find other cashless ways to pay.

Making banknotes has an environmental impact, although the new polymer notes do have a lower carbon footprint than their paper predecessors. Bank and credit cards are normally made of plastic, but some banks have introduced biodegradable alternatives. The majority of people have at least one card and use banknotes, so to reduce these methods of payment could have eco-friendly advantages.

The COVID-19 pandemic has had a significant impact on the way we pay for things and transfer funds, partly to reduce touch points and potential infection, and to reduce the need to visit the bank. It accelerated the decline of cash transactions because some felt safer staying at home and shopping online, and non-essential shops were closed; this had the added bonus of shopping being delivered directly to the doorstep!

Prior to the pandemic, my local pub, the Freston Boot was reputed to be the first cashless pub in the country. Their main reasons being:

  • It saves money
  • It is faster
  • It saves time, no need to cash up and pay cash into the bank
  • It is safer, less security needed and no potential theft
  • It is more hygienic

To survive since the first lockdown, many businesses have followed suit.

I rarely use cash nowadays (but I do need it for my local Chinese restaurant as it only takes cash!), because using the technology at my fingertips reduces the need for me to carry cash. I’ve just got to make sure that I have my cards, phone or watch with me, or I have to fire up my home laptop.

There is a rise in the use of digital currencies, which can be bought via electronic transactions, and are yet another step away from using cash.

Despite the increase in these cashless transactions, the Bank of England confirms that banknotes and coins will continue to be used, with a current £70 billion worth of notes in circulation (roughly twice as much as a decade ago).

In conclusion, I don’t think we are heading towards a cash free economy, but we are certainly seeing an increase in cash free transactions, so we need to make sure we have our cards or tech at the ready, so we don’t miss out!

If you have any queries, you can contact me on 01473 833411 or [email protected].

Peter is the Guild’s accountant. This article is designed for the information of readers. Whilst every effort is made to ensure accuracy, information contained in this article may not be comprehensive and recipients should not act upon it without seeking professional advice. “Larking Gowen” is the trading name of Larking Gowen LLP, which is a limited liability partnership registered in England and Wales (LLP number OC419486). Where we use the word partner it refers to a member of Larking Gowen LLP. © Larking Gowen