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Covid-19 has increased volumes of online shopping which increases cashless payments. The older generations who have historically been less inclined to embrace technology have also turned to online shopping and I think at least some will continue to enjoy the benefits post Covid-19, further increasing the use of cashless payments. So I think Covid-19 will result in a shift closer towards a cashless economy.
Slightly off topic but I am in favour of a cashless society because the polymer notes contain animal tallow, so less animals are harmed in a cashless society and it is also more hygienic for covid purposes!
78% of the purchases at the cafe and store are now paid through credit cards or other electronic transfer — up from 10% just five years ago. People are slowly moving towards a cashless economy due many factors listed above but mainly because of the convenience.
According to Financial Times, ATM transaction volumes fell as much as 62 per cent year on year at the start of the UK lockdown which demonstrated peoples fear and reluctance to withdraw and use cash.
Positive aspects would be that money transaction can be safer, it is harder for people to argue a transaction did not take place (reliance on receipt will reduce) and it is easier to control the flow and taxation of transactions.
Negative aspects, coming from a personal experience and it is a personal view, is that using cards causes people to spend more money regardless of the state of their financial affairs. It is always easier to tap your card and think about the transactions later. This behaviour may cause financial destruction and negatively impact household. It is always easier to control and monitor how much you spend when you have cash on you.
There is also the aspect of data security and the danger posed by contactless cards. There has been many instances of misuse and abuse in regards to that technology.
Will cash be redundant, no as its face value will never be replaced but there will be a reduction as many of the older generation is starting to embrace it.
I agree with your point regarding convenience. We live in a time when people would choose ease and convenience over most things.
Without Covid-19 I believe the economy was still moving in the direction of a cashless. I personally carry cash as a backup in case I am not able to use my card (for instance of the card reader is not working in a store), so I use my card a whole lot more. Definitely a change from a couple of years ago when I would not touch my card.
This pandemic has made this gradual change occur faster and has forced those sceptical about contactless payments to start using it.
To say that there will be a shift to a cashless economy is a bit of an exaggeration. My take is from a charity standpoint. Taking into consideration how much people have suffered during the pandemic, notably their loss of jobs and stability, once the pandemic is over and a vaccine has been found, the various government (gov't) incentives will slowly come to an end and although some will find it easier to cope others would not. They may have lost their job and if the mortgage freeze comes to an end for example, then they may fall in the homeless statistic.
There are also those who are already homeless that the gov't have put in temporary accommodation and if the vaccine is found, although the gov't claim to have resettled the majority of them, there will be those that end up on the street, and will rely on the generosity of people walking past them. That will be difficult if there is no cash or coins to give them. You could go as far as to say that in a way those that give to the poor are helping the gov't because I'm sure without that cash there will be death from hunger by the some of them.
Finally, there was an instance, a couple of years ago, where the gov't mentioned they were in discussion to take away the 1 and 2p coins and in the next few days they received a lot of backlash from charities around the UK. This was because they made the argument that without the coins they receive from people generosity (dropping your change in the shop), they would not survive.
This is a very interesting point. The perspective is very different and unique. Never thought of it from a charity stand point before.
Economies across the globe are encouraging their citizens to avoid using cash to help slow down the spread of Covid-19. Some believe as a result of the pandemic hard cash would be ditched for good. People are always looking for easier ways to pay for their goods and services and digital payments are simple and recorded neatly. Virtual money also makes it easier for governments to monitor for tax evasion and money laundering. However, there are also dangers to privacy as people may find that undemocratic governments and private companies are using citizens personal data for personal gains.
Although, it is not plausible for the UK to become a fully cashless society in the imminent future, I do believe there will be a sharp decline in the use of hard cash.
A great podcast to understand this topic would be Linklaters podcast: https://open.spotify.com/episode/5qWDFBfNVXlBtyio5Dmvtm?si=is4TtiBkTvKVf5AgJGtUWw