Despite the rise of digital payments, the resurgence of cash use in the UK signals that physical money, supported by emerging cashtech innovations, remains an essential part of the financial ecosystem.
Cash use has increased to 19% of all transactions in the UK, marking its highest use in over a decade. Despite what the media and some fintech evangelists may say about a ‘cashless society,’ physical money seems to be here to stay for the foreseeable future.
Digital payments have dominated the fintech conversation for years. But the unexpected resurgence of consumer cash use presents a fascinating question for industry players – should physical cash be part of FinTech?
We recently explored this question on LinkedIn and exposed some extreme views.
Some leaders wished cash would perish, with some citing a list of problems with cash, from corruption to inefficiency. One surmised, ‘Paper is gone…cash is not what we will do in the future.’
However, other FinTech players were more open to physical cash being a valid target for FinTech. Omdia’s Philip Benton said, ‘For me, FinTech is about reimagining the traditional way of doing things…if you have a product or service that makes it easier to handle cash, I would say it’s a FinTech.’
Regardless of how much our industry thrives on digital payments, cash remains vital to the global economy. Research by PayComplete, a global leader in cash management solutions, revealed that over half (57%) of organisations do not foresee their business becoming completely cashless.
One reason consumers won’t let cash die is its universality and independence of internet connectivity, which offers a level of privacy and security that digital payments fail to provide.
Several trends have driven the increase in cash use. The cost-of-living crisis and other economic uncertainties have made people more cautious, turning to cash for tangibility and financial security. Indeed, 52% of those who prefer to use cash do so because it helps them stick to a hard spending limit, deterring them from overspending. For the unbanked and many underserved populations, cash is the most accessible payment method.
This renewed focus on cash has been compounded by implementing the Financial Conduct Authority’s access to cash policy.
On balance, popular industry opinion seems slightly in favour of companies offering cash technology (cashtech) being considered part of fintech.
Cashtech refers to integrating smart hardware and technology to make cash management as close to a digital process.
The fusion of technology aims to enhance business efficiency and safety while bettering the customer experience associated with cash transactions.
Businesses work hard to create positive customer relationships, but removing the choice to pay with cash can undermine these efforts and impact brands.
Cashtech addresses the pain points of businesses and consumers, enhancing security, operational efficiencies, and financial inclusion. It allows businesses to competently offer cash as a payment method.
Looking into the future, the relationship between cash and financial technology will continue to evolve.
As innovations continue, we expect to see even more sophisticated cash tech solutions emerge. Potential advancements like blockchain technology to track cash could further enhance cash use and acceptance.
For these advancements to gain traction, we need more cash innovators in the industry, allowing fintech and cashtech to work harmoniously.
The industry has some highly vocal cash supporters, such as Ron Delnevo. Being a consultant, chair, and spokesperson of the Payments Choice Alliance, Ron has actively promoted cash use and acceptance, reinforcing the importance of the consumer’s right to pay with cash. Through his social media activity, he continues to positively educate organisations on the benefits of cash payments.
Today, cash is acknowledged for its importance to the economy and from a wider social perspective. Cashtech will likely represent a growing part of the broader economy, even as the world of alternative payment methods expands.
The challenge for our industry is to ensure that cash is a viable payment option for organisations to accept and remains available as a payment choice for customers.
Whether people like it or not, cash remains integral to the financial ecosystem.
Its refusal to die results from consumer demand, but continuing to accept it is expensive and fraught with problems. Cashtech bridges the gap between traditional cash use and modern technological advancements. This fusion enhances security and efficiency and supports financial inclusion and customer satisfaction.
The dialogue between cash and financial technology is far from over, but it is time for fintech to think outside its (eMoney) box.
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