A headline in the Guardian recently announced ‘The rise of the cashless city’; the article exploring the issues revolving around our increasingly digital and contactless financial lives – lives which make for some interesting numbers. Card spending accounted for 77.1% of national retail sales by the end of Q3 2016, while £9.3 billion was spent in the UK using contactless between January and June 2016 – £1.5 billion more than the total contactless spend of 2015. And it’s not just the UK that’s avoiding the hole in the wall – it’s predicted that Sweden could become the world’s first completely cashless society as early as 2030.
Disruptors impact the vulnerable
This has mixed implications. For fintech companies this is clearly a huge win, as it is for the average person on the street who very rarely finds themselves carrying cash these days. However for certain sectors of society this is a disaster. Street vendors, charity fundraisers, homeless people, buskers, all rely on physical donations to support them.
Small scale solutions are beginning to emerge. ‘Honest Abe’, a homeless man in Detroit, began accepting card payments in January 2016 through a Square card reader attached to his smartphone. Meanwhile in 2016 a Big Issue seller in London became the first in the UK to start accepting contactless payments and Apple Pay.
This approach is also being adopted at a wider level. In Amsterdam a company has created a contactless payment jacket that lets passers-by donate money with the tap of a contactless card. Donations are capped at one euro and the money can only be redeemed through an official homeless shelter in exchange for food, lodging, or training. Closer to home, in the UK 11 charities including Oxfam and Barnado’s began a four month trial in September 2016 using donation boxes which accepted both cash and contactless payments. The results were encouraging with the average cashless donation larger than cash. The boxes are set to be rolled out on a wider basis later in 2017.
However not every approach is a resounding success – again in Amsterdam vendors selling the equivalent of the Big Issue began to use handheld consoles to accept card payments, but quickly rejected these as being too bulky and unreliable. This neatly illustrates that the technology has to work with the user in mind for the solution to be a success.
Opinion on the future of cashless societies is divided. Some argue that it is a natural progression to reduce the high cost of handling cash, and that advances should not be hampered by the minority of unbanked citizens. Others argue that by further excluding minorities they will be eventually become completely cut off from society. However, it seems a foregone conclusion that society will need to find ways to adapt to being cashless, creating solutions that are inclusive of its most vulnerable members – after all, if we are going to truly progress, we need to innovate for everyone.