Cash is a sinking ship, and coronavirus might be its final voyage

By Aisling Finn on Monday 30 March 2020

OpinionDigital Banking

At one point, in the not so distant past, cash made the world go round—right now that couldn’t be further from the truth.

Cash is a sinking ship, and coronavirus might be its final voyage
Image source: Photo by Jason Blackeye on Unsplash


It’s no surprise that with the rise of fintech, contactless payments, and digital banking, the days of cash are looking increasingly numbered.

Now, with the outbreak of coronavirus, we’re edging closer to a cashless society than ever before. So, could the coronavirus be the final voyage for our once-loved coins and notes?

I, for one, sure hope so.

Downright dangerous

Banknotes are notoriously dirty, a study from the London Metropolitan University found that both coins and notes of all denominations carried 19 kinds of bacteria, including the antibiotic-resistant superbug MRSA.

And just a few weeks ago the World Health Organisation urged people to adopt contactless payments to stop the spread of the deadly coronavirus after it was reported that Covid-19 could survive on banknotes for several days.

That plea came after it was revealed that both China and South Korea were disinfecting and isolating used banknotes to help prevent the spread of the virus—South Korea was even reportedly burning potentially contaminated banknotes.

Actual data from the UK shows the use of cash machines has halved in the past few days, and many smaller retailers have shunned cash as a form of payment. 

Even before the current pandemic, you’d be hard pushed to find a shop that exclusively accepted cash over card payments.

I challenge anyone (once the UK’s lockdown is over and normalcy returns) to pop down to their local market to see just how many small vendors only accept cash payments—I’ll be surprised if many do.

According to Access to Cash, Britain’s cash infrastructure costs around £5 billion a year, meaning that cash is also incredibly expensive to run. 

The message is clear, cash isn’t just slow, inefficient and costly to businesses—in 2020, cash is being labelled as downright dangerous.

A digital wave

The descent of cash from much-loved to merely “meh” has been a long journey.

In the UK, the number of cash transactions has flatlined over the last decade, with card payments overtaking cash in 2017 and since then the gap between the two has exploded.

According to UK Finance, in 2018 there were 708m payments made through alternative methods such as PayPal, Apple Pay and Google Pay—a figure is set to more than triple to 2.4bn in the next decade.

And shops both big and small are now favouring digital payments, Britain’s biggest retailer, Tesco, recently opened its second cash-free store in London, clearly highlighting a demand for cashless stores. 

While cash accounted for 60 per cent of all UK transactions in 2008, that figure had dropped to just 28 per cent in 2018.

Data also suggest that by 2028, cash will account for just nine per cent of transactions, with contactless (37 per cent) and card payments scooping up the remainder, I think it’s fairly safe to assume that this figure is likely to be accelerated because of the current climate.

Another knock-on effect of the coronavirus, on Tuesday last week it was announced that the contactless limit would be increased from £30 to £45 from 1 April to help combat the spread of the deadly virus— a move that has since been echoed across Europe as well.

This jump was already under consideration but was sped up amid the worsening outbreak and will remove yet more reasons to carry cash.

Final voyage

Coronavirus might not have led cash into insignificance, but it certainly comes at the physical currency’s darkest hour.

It’s never been a secret that cash can harbour bacteria—this was, of course, one of the main reasons we shifted to polymer banknotes after all—but the current climate around coronavirus could leave the currency’s reputation in absolute ruin.

As someone who never carries cash, I welcome this shift towards digital payment methods— they’re quicker, easier, and a whole lot cleaner.

However, and this is a big however, cash is still the lifeblood of many SMEs and marginalised groups. 

According to HM Treasury, over 15 per cent of people with an income under £10,000 a year rely completely on cash, compared to less than 2.5 per cent of all higher income groups.

Mick McAteer of the Financial Inclusion Centre said a totally digital society would “exacerbate the exclusion of marginalised groups who have already been impacted by things like the closure of bank branches” and could ultimately “make a bad situation worse.” 

So while I fully believe that cash should soon be a thing of the past, we must ensure that what works for most of us, works for all of us.

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