The cost of contactless: Will demise of cash cost us all dear?
As more and more of us use cards to pay for everyday goods and services, what are the real implications? Mark Andrews investigates.
The turnstiles to public toilets are not normally a bellwether for the economy, but could the ones in Bridgnorth be a pointer to the future?
The lavatories in the town's Listley Street have been the subject of some debate in the past few weeks, following the decision to make them accessible only by contactless debit card.
"I find it absolutely incredible Bridgnorth Town Council expects members of the public to use a contactless payment card to make the miniscule amount of 20p," says tourist Godfrey Burley, in town to see the Cliff Railway.
For its part, the town council says a spate of vandal attacks and thefts from the coin box on the door left it with little choice. But it is an example of how we are moving, slowly, but surely towards a cashless society.
In 1985, cash changed hands in 87 per cent of all transactions. Today the figure is just 40 per cent. The figure is expected to fall to 18 per cent by 2027.
It is hardly a new trend. Restaurants in the UK began recognising the Diner's Club credit card as early as 1953, and 10 years later American Express came to these shore, although the cost of subscription made this very much a niche service.
It was the launch of the more affordable Barclaycard in 1966, followed by Access in 1972 which brought card payments into the mainstream. But while these grew in popularity, they were still limited by the fact that they needed required human intervention to provide a payment slip and check the signature.
However, the arrival of chip-and-pin cards in 2003, followed by contactless payment in 2007, has made it possible for cashless payments on everything from petrol and parking to, well public toilets. It is reported that last year 3.4 million people across the UK used cash just once a month or less.
Even the Church of England has got on board. Lichfield recently launched a trial where hand-held card machines were passed around in lieu of the collection plate, although many will find it strange to see this during the traditional offertory hymn. Church chiefs introduced the scheme after collections were hit by fewer people carrying cash with them.
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Reverend Jim Trood, rector at St Matthews Church in Walsall, one of the parishes taking part, said: “One of the older members at our church said he thought it was great, commenting it was so much easier than having to find the right money to put on the collection plate.”
But what are the real implications as we head towards a cashless society?
It is not hard to see why many businesses would favour such a move. For shopkeepers, it would render the daily trip to the bank obsolete, ending the need for staff to walk across town with a briefcase stuffed with money. Wages clerks would not need to spend ages counting and bagging up money. And, as has proved the case in Bridgnorth, it would end once and for all the problem of thieves and vandals breaking into coin operated machinery to steal a bit of petty cash.
From a government perspective, the end of cash would put a stop to 'cash in hand' tax avoidance, and also make it much more difficult to offload stolen goods.
But there is another side to all this, as residents a few miles up the road in Much Wenlock will testify. Last month the town became a cash desert when its last remaining bank – and with it the cashpoint machine – closed.
The town's mayor, Councillor Graham Edgcumbe Venning observed: "We now have no bank, no ATM and no building society.
"The problem is that the the broadband around here is not very good. If the broadband fails, traders can't use their card machines, and if customers can't take out cash, that's a huge problem."
At the moment the town with no cashpoint is thankfully a rare occurrence, but all the signs are it will become an increasing problem across the country as the use of cash declines. Figures released by cashpoint operator Link showed that 1,300 machines were closed in the five months until the end of July, the first decline in more than 20 years. And there are fears that it is the poor and the elderly who will be hit hardest.
Gareth Shaw of consumer organisation Which? says: “Free-to-use cashpoints are disappearing across the country and the spike in the rate of closures for supposedly protected machines in remote and rural locations is particularly concerning.
“Millions of people are still reliant on cash in the UK and our research has shown the less well-off and older generations are most at risk of suffering financial and social exclusion through the double blow of ATM and bank branch closures."
Mr Shaw is calling for the Payment Systems Regulator to intervene.
"The consequences of inaction for consumers and businesses affected by these changes are potentially dire,” he added.
As alluded to by the Much Wenlock's mayor, the demise of cash will leave us very much at the mercy of technology. In June services from Visa, American Express and Mastercard went down with technical issues, highlighting the risk of relying on a single form of technology.
"When the trolley came around on the train and the card payment wasn't working, the only people who could eat were those with cash," one sceptical banker noted.
It is also worth remembering that banks do not work for nothing, and that every time you swipe your contactless card or punch in your chip-and-pin number, you will be paying for the privilege one way or another. The card providers make their money by charging a commission every time you make a payment, and while the money may not come directly from your bank account, the business you are dealing with will need to pass on the cost one way or another.
But there is also a darker problem. Last year there were 467,000 incidents of contactless card fraud, with £27 being stolen every minute.
The Bank of England's chief cashier Victoria Cleland says she has heard of instances of money being "taken off contactless when you walk past something".
She does not use contactless payments herself.