Inconvenient, not impossible -- a week without cash

By Benjamin Salisbury

Cash is still the primary payment choice in the UK, but that may change. With credit, debit, online and even mobile purchases on the rise, fewer Brits are pulling out bills and coins to pay.

A May 2015 report by the Payments Council found that though cash is still the number one payment instrument, the share of cash transactions carried out by consumers and businesses fell to 48% in 2014 from 52% in 2013. That's the first time non-cash payments exceeded those made with cash, the report says.

This trend has been growing over recent years, marked by increasing use of alternative payments such as direct debits, standing orders and mobile and online payments.going-cashless

"Cash use has been decreasing gradually over the past decade and we forecast it will continue to do so," Shane McKenna, communications and social media officer for the Payments Council, said in an emailed response to questions. "By 2024, we predict that cash will account for 31% of total payments in the UK."

The convenience of plastic and other payments seems to play a large role
in the decline of cash. Most retail outlets accept major credit and debit
cards, online shopping is soaring and contactless and mobile payments
are becoming more popular (and may be even more so with the introduction
of Apple pay to the UK in July 2015). Since all of these methods are faster
and often easier to access than cash (no rooting around for exact change
or keeping track of loose bills), and they come with better security
guarantees, it's no wonder cash is left in the dust.

However, there will always be a place for cash. Most consumers find cash more convenient for certain items, such as taxis, and many retailers encourage cash use because there is no transaction cost to them.

Cash is also sometimes recommended for those trying to control spending. "It is often perceived that consumers managing limited budgets often turn to cash as a useful tool for rationing spending," says McKenna. "Certain demographic group -- students, the elderly, those on low income and people with a disability -- rely heavily on cash, typically to help them budget."

A week without cash
In light of these findings, I decided to see if I could manage for a week -- Monday to Sunday -- without cash. I knew it would be a challenge, but I felt it would be possible, as I use credit and debit for most of my expenditures, and the majority of my bills are paid via direct debit or standing order. Here's how the week went:

Monday (25 May) was a Bank Holiday, so my family and I went to a National Trust property for a walk, play and a picnic. We didn't have to pay an entry fee, thanks to an annual membership card that we paid for by direct debit, so no need for cash in this instance. However, I had to distract the boys from the ice-cream van, which accepted cash only.

On Tuesday, I paid my mobile phone bill and landline rental by direct debit, and I was able to fill up the car with petrol using my credit card.

I spent most of the day working, but needed to pop out and get some milk. This was the first time I really missed cash, as I only wanted a pint, which costs 60p. But I used my debit card and the shop assistant did not seem to mind -- generally, purchase minimums only apply to credit cards, which charge higher processing fees. Thus, I ended Tuesday without having reached for my cash.

On Wednesday, I had to go out and park in a town centre. This was the most difficult situation for me in my cashless bid. Luckily, the place I was visiting offered the option to pay via mobile phone; I say luckily, as mobile payments have not been rolled out in all areas of the UK yet. It was also frustrating because I was in a rush, and to use my mobile phone, I had to take time to register and enter my credit card number.

Thursday I took a break from working to take my grandmother out. I usually take her for a ride around the countryside and then we stop off for an ice-cream at the beach if the weather is nice. Remembering my cashless state, I instead took her for a cream tea at a local farm shop, where I paid the bill by debit card.

Friday saw a slew of bills for gas, electricity and newspapers, which I pay for via direct debit, and on Saturday, we did our weekly shop that we always pay for by credit card to get the cashback reward.

On Sunday, I went to the newsagents to get my paper and though I pay for one Sunday paper by direct debit to get it at a cheaper price, I often buy another one, but I opted not to do this because of my cashless challenge.

In conclusion, going cashless was not too onerous, but I did forego one or two purchases I would normally have made and put a couple more on plastic that I felt bad about, as the value was so low (milk, stamps, parking and ice-creams). And I even reined in one or two impulsive purchases on a few occasions, so in that sense, not having cash actually helped me spend less.

Should the UK do away with cash, I think it's safe to say I, and likely most other Brits, won't feel much difference.

See related: 9 good habits of clever credit card users, How safe is unverified, contactless card technology?, Could Apple Pay help mobile wallets take off in the UK?

Published: 12 June 2015