Paper, plastic or brass?
2010 has set an economic milestone. For the first time, Britons are spending more in High Street shops using plastic than we do using cash.
According to the Payments Council, in the first eight months of this year we spent an estimated £272 billion using debit cards, compared to £269 billion using notes and coins and this gap is expected to widen in years to come. Meanwhile, the success of contactless payment cards such as Oyster on the London Underground indicates our willingness to forgo coins and use technology.
Cheques are also on their last legs. The banks have a target date of 2018 to close the central cheque clearing system with a review date of 2016 to determine if that deadline will be possible. Research by the Payments Council reveals that 55% of people are totally unaware that cheques are being phased out, whilst around a quarter think they are being phased out in the next couple of years.
But are we ready for a cashless society? The arguments for moving to plastic sound strong. People say that cash is cumbersome and can be lost or stolen, which is true, but lose your debit card in a cashless society and you can't even take a bus to the bank to collect a new one. When cheques are phased out, will every trader, such as a plumber, need to carry around a card reader to take payment? And in a cashless society, will charity collectors stand on street corners rattling a hand-held Chip and PIN machine?
Cheques have been around since Roman times, in the form of hand written documents, and in 1717 the Bank of England pioneered the use of the pre-printed and numbered cheques. Contrary to the urban myth, no-one ever tried to write a cheque in red ink on the side of a cow.
21st December 2010