Written by Technorati Tags: ATM, contactless, credit cards, debit cards
There are already 10 million Oyster cards in London and now only five per cent of journeys on the tube and bus networks are paid for by cash. It can only be a year or three before cash is removed from the system completely, which will mean significant savings. There are some people who are concerned about Oyster replacing cash, but I’m not one of them. One group of people who are definitely concerned about the rapid growth of contactless payments is ATM manfacturers. One of them, Bank Machine Limited, a subsidiary of Cardtronics, has found that 81 percent of Britain’s banked consumers who participated in a survey conducted by YouGov say they are aware of financial institutions’ efforts to reduce cash. According to a news release issued by Bank Machine, 75 percent of the survey’s respondents say they prefer the ability to use cash for smaller transactions and are "not happy" with the concept of a cashless society. Bank Machine say that recent contactless-card trials (they must mean RBS in Edinburgh) aim to encourage a cashless society but that is not what the British public wants. The survey also found that most consumers carry, on average, £26 for smaller purchases. I’m always surprised by findings like this as I never carry more than a few quid — in fact, I’ve just checked and I have £5.80 in cash. The survey also found that nearly two-thirds of all transactions under £5 are still paid for with cash, and these are precisely the transactions that the banks hope to capture with their contactless products. Bank Machine also go on to say, strangely, that “At a time when consumer debt in this country is at an all time high, it is completely irresponsible of card issuers to suggest that cash transactions are somehow old-fashioned.”
My opinions are my own (I think) and are presented solely in my capacity as an interested member of the general public. [posted with ecto]
David, your enthusiasm for all things contactless is clouding your judgement. Contactless growth is undoubted but to equate it with demise of cash is just plain stupid.
Oyster card is replacing (paper based) tickets, not cash. Londoners now flash their Oyster card to enter and exit the tube system. This is a great improvement on the previous ticket gate input process. How Londoners pay has NOT changed. The payment options for Oyster remain the same – cash or card payment. An analysis of Oyster card funding would be interesting as I suspect cash retains a 1/3rd share of the pot. I bought a travel card (paper based ticket) today and paid by debit card. The two individuals ahead of me both used CASH to top up their Oyster card. You have me in the 5% bucket and them in the 95% bucket.
Contactless credit cards are the same story. Users will settle their credit card balance by direct debit or cash settlement (Post Office counter, prepaid card users etc.). They will settle their bills this way irrespective of whether the bills relates to a PIN or a contactless transaction(s). e.g. contactless has no bearing on whether someone pays by cash or card. Contactless mobile when it arrives will be driven by the 2/3rds of all mobile users on prepaid contracts – the users who pay cash to buy airtime.
Interestingly the Cash which you so dislike is driven by banked consumers. APACS 2005 stats report consumer cash spending at £273 billion of which 85% was bank account funded (ATM, cheque cashing or cash back). These consumers have bank accounts and card plastic but still elect to manage some of their budget in cash. This will never go away as is evidenced in the yoy increases in ATM withdrawals. Included herein are the vast majority of people in this country who earn an average weekly wage/income. Cash is fundamental to their budgetary process. Their usage statistics are somewhat more relevant than those of a director at Consult Hyperion. They tend to hold a bigger float than £5.80.
Roll on contactless, cash or card funded.