The world will indeed go cashless one day. Over these past years, numerous countries are highlighting use cases of the change in the usage pattern of consumers towards available form of payments. New forms of payments are being developed at a rapid pace and they are witnessing much wider adoption at amazing growth rates. What’s noteworthy is that people are drifting away from traditional forms of payment systems, primarily cash, paving the way for a cashless future. Just take the case of developing nations in Africa where mobile money driven by mobile operators has been the way to pay these past few years.
Recently, it came to light that cashless payments overtook the traditional currency transactions in the U.K. in 2014, according to a study by the Payments Council. It will definitely take some time for the cash transactions to completely fade away in the U.K., but this improvement sure shows all the signs of the transformation.
Payments Council stated, “This is not the beginning of the end for cash, with many people still heavily reliant on the notes in their wallet.” Nearly 40% of people who heavily rely on cash are aged 65 and above as per the Payments Council. This notifies that the younger generation is more equipped for cashless payments than transactions with notes and coins. The report also states that 2.3 million people rarely used cash, out of which more than half of the population was under 35 years of age.
Cash payments made in the U.K. in 2014 represented 48% of all payments and the remaining 52% was made up of electronic transactions, ranging from high-value transfers to debit card payments and payments made via cheques. With this significant change, cash volumes are expected to fall by 30% over the next decade.
The European continent is advancing at a faster pace in the payments sector with seven countries above the 50%-mark in terms of non-cash payments (out of the total value of consumer payments). The growth of online shopping and new payment methods such as mobile and contactless payments has made way for the cashless payments in recent years.
Below is the data of countries which have a 50% and above non-cash payments’ share of the total value of consumer payments:
The above percentages have been derived from MasterCard exclusive reports as part of an exclusive study called “MasterCard Cashless Journey” on 33 countries.