The death of cash
As the ATM celebrates its golden anniversary this week, questions about the future of cash as a payment method are being raised as figures show that traditional methods are being abandoned in favour of new modern ways to manage our finances.
Research by the Co-operative Bank has highlighted that the habit of carrying cash is becoming extinct, and they predict that with contactless payments trebling in a year it is realistic to think that 65% of all transactions will be made by mobile phone by 2025.
The demise of physical currency has been anticipated by experts for some time with the introduction of contactless cards and Apple Pay threatening coins and notes. However, whilst there is a general mood shift towards using contactless, there are conflicting statistics from the Bank of England which state that 94% of UK adults use cash machines – showing that the appetite for cash is alive and well.
The head of customer experience at Barclays, Raheel Ahmed, commented on the matter: "Even though recent years have seen a huge uptake of digital banking and card payments, cash remains a crucial part of most people's day-to-day lives - whether it is paying for groceries or doing the office coffee run”.
But as consumer needs change along with the rapid rate of technological evolvement the banking industry is having to look at newer forms of payment. Near field communication technology (NFC) is a new kind of contactless technology being employed at ATMs in the USA and UK by some banks which allows for a withdrawal of money without a card. NFC uses wireless connectivity and allows the user to request a cash withdrawal that translates this to ATM when they come in close contact.
The chief executive of the ATM Industry Association notes that this kind of digital transaction is not only faster for customers but also adds better security: “Cardless transactions take just 10 seconds for customers to get their cash, compared to around 30 seconds for traditional card withdrawals,” he states. “Speed is a very important part of consumer experience.”
There is however an assemblage of cash aficionados who favour the traditional way of payment and harbour a distrust of contactless payment – and this way of thinking is far more popular than we might think. Whilst the younger generation in particular are keen to ditch the coins in support of what many argue is a speedier and more convenient payment method, others are horrified by the thought of a completely digital banking future.
One of the key reasons for the argument against digital payment is the ease at which we can make payments, and with little mental thought. By turning money into an abstract concept that only exists behind a screen we find that customers spend more and consume more spontaneously.
Another concept that doesn’t sit comfortably with many is that of our digital footprints. A future that is entirely digital means that there is constant unavoidable tracking of our spending habits, locations of shopping and other such sensitive data which, in the wrong hands, could be put to use in a negative way. Those with a particularly dystopian view may be concerned about the idea of their daily behaviours being read by a national government, hackers or any other group.
That being said, some statistics do speak for themselves. Data collected by the BBC shows that between April 2015 and April 2016 some 600 bank branches closed in Britain, with the banks citing a move to online banking as the chief reason.
So is the ATM due for elimination only 50 years after its invention? Maybe not immediately, but one thing is certain: it seems cash has had its heyday and banks are making way for new shiner ways to pay.