“What year doth dosh disappear forever?” This was the precise question asked by Sandy Lindsay MBE on Twitter in response to my call for questions to #AskAFuturist. So, when will we see the end of cash? Or will we always keep a little wonga in our pockets?
The decline of cash as a form of payment has been precipitous. At the end of the 2000s, cash still represented around 60% of all payments made. By the end of the 2010s it was down to around 40%. The Access to Cash Review run by former financial ombudsman Natalie Ceeney suggested that at the current rate of decline, cash use would end as soon as 2026.
This is unlikely. As the report notes, the people making the shift from cash to card today are those who can. Those with the financial stability, confidence in technology, and access to banking to do so. This represents maybe 80% of the population, so cash use will continue its steep decline. But moving to cards is either impractical or impossible for the last 20% or so. For a variety of reasons – poverty, disability, financial insecurity – this group can’t or won’t access digital banking.
Eventually most of these people will make the switch, supported through a combination of education, better infrastructure (e.g. the last remaining all cash shops taking cards or ending their excess charges and minimum payment limits), and new services designed specifically to support them. But the rate of decline of cash will naturally slow down as we reach the point where more work is required to help people to transition.
End of cash: Difficult transition
The transition away from cash won’t be smooth or clean. As we use less and less cash, so there is less reason for shops and banks to support it. Bank branches and cash points are closing. More and more shops and cafes are card only, having recognised the real costs of handling cash. Those people who don’t have access to alternatives are increasingly marginalised. Eventually the banks are likely to be allowed to co-operate to maintain some form of basic service while cash usage drops to just a few percent of transactions.
But I don’t believe it will go away altogether. Back in 2011 when trialling a watch with integrated contactless payment technology, I questioned whether I would still be carrying coins in my pocket in five years. I was right. It has been a few years since I have regularly carried cash, except for maybe a single note for emergencies.
Cash will remain, albeit in limited usage and in very small volumes, for the foreseeable future. It has too much power as a token, or an icon, for it to be eliminated altogether. My prediction is that we get down to 20% of transactions by the middle of this decade, and down to maybe 5% by the middle of the next. But there or thereabouts cash remains for at least a couple of decades after that.