The continued popularity of debit and credit cards is starting to affect the way consumers transact in the United Kingdom. A recent survey showed that more and more consumers are electing to use credit and debit cards instead of cash, even for the smallest transactions.
If you are the kind of person who has been carrying less than £10 in your wallet for some time now then you should not be surprised that statistics show that it appears cash is going to become obsolete in the near future.
Over the past few decades, as debit cards began to flood the market, more and more people have been turning to plastic. They are much more convenient and definitely much safer than carrying cash. As the internet became more intertwined with business and industry, though, credit and debit cards have become an obvious and necessary payment option for anyone who wanted to streamline their shopping experience.
Of course, with more and more businesses moving to an online platform, the need for consumer credit services has also improved; and because of this, people have simply become more accustomed to using plastic in place of cash, even for small, everyday purchases (like fuel, groceries, and other convenience items).
According to a recent survey (of 2,069 Brits) that was commissioned by CardSave, a small business payment specialist, and conducted by the research and consulting firm YouGov has shown that most Brits seem to believe that cash is going to be obsolete soon. As a matter of fact, residents in the United Kingdom expect that cash will be extinct; this is evident in the fact that they are carrying less and less cash every year.
Indeed, most Birts prefer to pay with plastic. This is easily evidenced when you take a quick peak into their wallets or purses:
- 62% typically carry less than £20 in their wallets
- 35% claim to carry £10 or less
- 93% of respondents report that their carry a debit or credit card when they leave their home for the day
Common knowledge suggests – and now this study confirms – that customers who use plastic to pay for their purchases have a tendency to spend more, even with small merchants. In February of 2012, for example, the average cash payment was £54 while the average credit card payment was £96, nearly double that of cash.
In light of this it should not be surprising that Brits anticipate a cash-free economy in the near future. It helps that credit and debit cards are far more secure and convenient than cash, which is also easy to confirm when you look at the evidence of this study:
- 57% of respondents categorically claim that cash will become obsolete
- 50% of respondents expect this will occur by 2035
- 36% of respondents expect this could occur as early as 2025
What this study also showed, though, is that small businesses who are not prepared to handle the switch to a plastic only commercial system may suffer big time. The research suggests that many shoppers who intend to use plastic, even towards small purchases, will likely opt to visit a competing business that will make it easier to use credit or debit. As a matter of fact, the survey showed:
- 16% of respondents report to have left a shop for this exact reason in the last 12 months
- 7% of respondents purchased less than intended for this exact reason
- 22% of respondents report they had to find an ATM (and thus pay the associated fees) in order to pay for their goods
According to Clive Kahn, chief executive at CardSave:
The days when consumers wanted to pay by cash are over. They increasingly expect to pay by card for everything – from small shops to tradespeople such as painters and window-cleaners.
According to Kahn, small businesses who do not already accept cards could improve their business prospects by simply making credit and debit options available to their customers. If you look at the statistics, this change of policy will not only be more enticing for people who want to use credit but, since people who use plastic tend to spend more per transaction, instituting plastic options could increase sales every day for these small businesses.
Consumers in the United Kingdom claim that cash will no longer be king in the very near future. Most consumers already prefer plastic to paper (when it comes to money, at least) and they expect that small businesses will follow suit.