With Recent Outages, Can The UK Ever Go Cashless?

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Payment system outages at the likes of Sainsbury’s, Tesco, and Greggs have left consumers and business owners questioning whether the UK can ever go completely cashless.

In recent years, cashless payments have become increasingly popular. For the most part, consumers are now able to leave their purses and wallets at home, instead opting for the flourish of a bank card or even the tap of a phone or watch. In 2022, just 14% of all money paid in the UK was paid in cash, down from 61% in 2007.

Several business sectors are already leaning towards a cashless approach. For example, online grocery shopping has become the norm for a lot of buyers. There’s no need to brave the weather or hectic bank holiday weekend crowds, and deliveries can be arranged at times to suit the shopper. Cashless purchases and deliveries can even be arranged months in advance thanks to subscription systems and marketplaces, like Amazon, which have helped pave the way for e-commerce businesses to offer their products to buyers. 

Other online industries, like online gambling, rely on cashless payment systems, too. As well as linking bank accounts and using debit cards, some casinos and sportsbooks accept cryptocurrency payments, which, as Bram Welch points out, are especially popular with those looking for instant payouts, rather than waiting days for money to be withdrawn to a bank account. eWallets are another increasingly common form of payment and withdrawal method for players. Money can be withdrawn directly into the wallet but it can still take days for the funds to be transferred from a digital wallet to a bank account.

Cashless payments are also popular with brick-and-mortar stores, as well as shoppers. There’s no need to withdraw cash from a bank or even a cash machine. And, thanks to changes in cashless payment limits introduced in 2021, there is rarely a need to even insert a debit card or remember a PIN number.

For businesses, cashless payments are more convenient. There’s no need to carry cash or work out change, and there are no weekly trips to the bank to deposit regular takings. There’s no danger of money being stolen in cashless stores. For these reasons, there has been an increase in the number of stores that no longer accept cash payments.

But cashless payments don’t always work out well. Damaged cards and dead phone batteries can render cashless payments useless, but the fault doesn’t always lie at the consumer’s end.

In March this year, Greggs was forced to close some of its shops when their payment systems failed, while other branches were accepting cash only. There have also been highly publicised cases at Tesco and Sainsbury’s supermarkets, both of which were forced to cancel order deliveries. McDonald’s, too, faced similar problems with their card payment systems, affecting stores around the world and not just in the UK.

Although Sainsbury’s blamed a software update for the failure in their system, information from the other companies has been lacking. There has been speculation that because the problems occurred at around the same time, they have been caused by a shared third-party system, but nothing has been confirmed. There are a lot of cogs in the cashless payment machine, and it only takes a problem with one of the disparate and third-party systems to render the whole payment system unusable.

Although the demand for cashless payments has been driven by the younger generations, the older generations are catching up. According to one survey, 80% of shoppers aged between 85 and 95 pay using contactless methods. The figure is high but still falls below the 93.4% of general in-store payments that are now contactless. Charities have expressed concern that cashless societies will exclude certain groups of society from being able to pay for basic services.

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There will always be the potential for software and technology failure in payment systems, and while most problems are resolved in a matter of minutes, the recent spate of issues has left consumers concerned. A day of outages at supermarkets is inconvenient, at best, but it could leave some shoppers without much-needed essentials, and what of essential services like prescription medications or baby food?

While the demand for cash is dwindling, it’s unlikely to disappear completely. It may become more of a backup alternative, especially if cryptocurrency and e-wallets become more accessible and as cashless card payments continue to see an increase in use across generations. 

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