Is Cash Still King?
With the likes of Sainsbury’s, Tesco, and the Co-op creating cash-free solutions to purchase items in-store, the notion of ‘Cash as King’ could somewhat be questioned. Technologically advanced payment methods do have the benefit of faster, more convenient payments without the added weight of a cash-filled wallet. However, just how sustainable are these new advancements and how convenient will a ‘cashless’ society really be? And what does this mean for our financial security?
The timeline below examines just a few events that have occurred this year which present a concern when considering the notion that card will soon knock cash off its throne.
A Timeline of Events
February 2018: Contactless fraud overtakes check scams for the first time
UK Finance figures reveal that contactless fraud has overtaken check scams for the first time in the first half of 2017, reaching £5.6bn. Sarah Lewis, Head of ID and Fraud Decision Strategy at Equifax UK has stressed that the contactless limit should not be raised as this will increase fraud.
April 2018: TSB IT meltdown causes 1.9m customers to be locked out of their online accounts
IT upgrade failure lasts for three days leading to customers unable to access their online accounts, incorrect balances being shown when/if they do, or seeing other people’s accounts on their systems.
August 2018: Card fraud escalates to more than £2bn
Fraud reaches over £2bn from UK credit and debit cards over the past 12 months; an increase of 38% on the previous year. Almost 1 in 10 adults have been affected, which is an estimated 4.7m people in the UK. Head of Money at Compare the Market, Shakila Hashmi, says the average amount stolen from accounts escalates from £475 in 2016 to £833 in 2018.
September 2018: Visa glitch causes customers to double pay
Visa debit card glitch results in thousands being charged twice due to a hardware failure. Chip and pin were the only transactions effected – ATM withdrawals were not impacted. After five hours, the system is mostly recovered. The outage is said to be a potential threat for fraud as Which? advises people to be cautious of any calls and emails regarding the outage.
These events highlight the unstable qualities of relying solely on card and mobile payments alone. While cash-free retailers may appear to be the most convenient and fastest method of payment, the technological glitches that are happening too often must be considered when businesses are making decisions to go cash-free. Moreover, with card fraud increasing at a somewhat rapid rate, the need for cash reserves would seem necessary.
Cash then remains the only form of payment that has no hidden charges; it has a limited possibility of fraud, and ultimately cannot ‘fail’ in the transaction process. Technology is certainly an avenue which businesses should be looking towards for development and customer satisfaction. However, perhaps technology should remember its paper-roots because if, or rather when, it fails, people turn to cash: tradition triumphs.