As we tap to­wards a plas­tic fu­ture, we must count the cost of be­ing cash­less

Sunday Independent (Ireland) - Business & Appointments - - FRONT PAGE -

THE penny hasn’t dropped yet for many Ir­ish con­sumers, but cash is king no longer. The era of a cash­less so­ci­ety is fast ap­proach­ing and you can bet your bot­tom dol­lar — if you can still find one — that paper and coin-based pay­ments will be­come a thing of the past within a gen­er­a­tion.

The ser­vice in­dus­try, for ex­am­ple, is en­ter­ing an era when the phrase ‘keep the change’ will soon be­come re­dun­dant. How­ever, change of another sort is com­ing, but in a dif­fer­ent form, and at a re­lent­less, un­stop­pable place.

That’s the ver­dict of in­dus­try ex­perts and is backed by the ev­i­dence of trends and sur­veys.

Such an un­prece­dented move away from cash will have pos­i­tive and neg­a­tive reper­cus­sions.

The con­ve­nience of con­tact­less pay­ments is a mas­sive boon for con­sumers, ob­vi­ously. But a cash­less so­ci­ety may come at a cost.

What will the fu­ture hold for street beg­gars and buskers who rely on loose change from passers-by?

Will church plate and church gate col­lec­tions lose out in a cash­less so­ci­ety, or could they ben­e­fit from re­ceiv­ing larger do­na­tions by mov­ing to elec­tronic pay­ment tech­nol­ogy?

What about bar staff who rely on loose change in their tip jars to pay their bills?

The drive to­wards a cash­less so­ci­ety is main- ly com­ing from three sources: gov­ern­ments, con­sumers and fi­nan­cial in­sti­tu­tions. For gov­ern­ments it saves mint­ing, print­ing and dis­tri­bu­tion costs, as well as re­mov­ing the dan­ger of coun­ter­feit­ing and money laun­der­ing.

For busi­nesses, cash­less trans­ac­tions re­duce costs and the has­sle of man­ag­ing paper and coin-based in­come. The tech­nol­ogy also re­duces se­cu­rity risks. For con­sumers, cash­less tech­nol­ogy pro­vides in­stant ac­cess to bank­ing fa­cil­i­ties and enor­mous con­ve­nience.

With a lit­tle en­cour­age­ment, Ir­ish con­sumers are making the switch away from cash. In­creas­ingly they are us­ing debit cards as an al­ter­na­tive to cash, new re­search shows.

Fig­ures from the Cen­tral Bank show there was a 14pc rise in the value of spend­ing on Visa and Master­card debit cards in re­tail out­lets in March, with a €2.7bn spend. This amounts to an ex­tra €331m trans­acted on debit cards.

With over 35,000 Ir­ish busi­nesses of­fer­ing con­tact­less pay­ment fa­cil­i­ties, con­sumers are con­tin­u­ing to make the switch. The Cen­tral Bank too is con­tin­u­ing its cam­paign to turn Ire­land into a cash­less so­ci­ety by en­cour­ag­ing its own staff to stop us­ing notes and coins by hav­ing a cash­less HQ in Dublin’s dock­lands.

The mas­sive growth of fin­tech, peer-to-peer money and dig­i­tal wal­lets is chang­ing how peo­ple think of money.

Some 60pc of Ir­ish peo­ple be­lieve that Ire­land will be­come cash­less in the fu­ture, with a quar­ter of ‘Gen­er­a­tion Z’ be­liev­ing this will hap­pen in the next 15 years, ac­cord­ing to find­ings from Core Me­dia.

‘Dig­i­tal na­tives’, or the so-called Gen­er­a­tion Z — those aged be­tween 16 and 21 — will help push new pay­ment op­tions and a tip­ping point will be reached when they come of age, start jobs, and see their need for bank­ing co­in­cide with their flu­ency in emerg­ing tech­nolo­gies.

Glob­ally, Scan­di­na­vian coun­tries are lead­ing the charge to­wards cash­less so­ci­eties. More than half of Swe­den’s 1,600 bank branches nei­ther hold cash nor take cash de­posits. Swe­den’s equiv­a­lent of the Big Is­sue has launched a scheme with tech firm izettle that lets sell­ers ac­cept pay­ment by card on their smart­phones

Nor­way’s big­gest bank has also called for a cash­less so­ci­ety.

The Is­raeli gov­ern­ment has strate­gies in place to elim­i­nate cash from the econ­omy al­to­gether. South Korea is al­ready one of the least cash-de­pen­dent na­tions in the world. It has among the high­est rates of credit card own­er­ship — about 1.9 per cit­i­zen — and only about 20pc of Korean pay­ments are made us­ing paper money. In Kenya about a quar­ter of its GNP is through mo­bile pay­ments app M-pesa.

Many EU coun­tries have capped the amount that can be legally paid in cash, and In­dia re­cently with­drew 86pc of its paper money in a bid to erad­i­cate tax eva­sion.

At home, Cork launched a pi­lot ini­tia­tive last year to pro­mote it­self as Ire­land’s first cash-free city. The ‘Cork Cashes Out’ cam­paign sought to high­light the ben­e­fits for both con­sumers and busi­nesses of go­ing cash-free. Sup­ported by banks, it led to a 500pc in­crease in the num­ber of con­tact­less pay­ments in a three-month pe­riod.

Shane Doyle, strat­egy di­rec­tor at Core Me­dia, said the growth of new pay­ments tech­nolo­gies will af­fect ev­ery mar­ket, cat­e­gory and brand.

“Our re­search shows it will be­come in­creas­ingly im­por­tant for brands to con­sider open­ing trans­ac­tion chan­nels through rel­e­vant plat­forms. As new pay­ment tech­nolo­gies in­crease, con­sumers will no longer have the simple choice be­tween cash or card – they will have many other op­tions at their dis­posal. Busi­nesses will have to fol­low suit and en­gage with plat­forms such as Ap­ple Pay.

“While Mil­len­ni­als — those born be­tween 1985 and 1994 — may be the first to adopt mo­bile wal­lets, but Gen­er­a­tion-z is the Ir­ish gen­er­a­tion who will lead the real change,” said Doyle.

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