While there is a lot of merit in introducing plastic banknotes, they may not actually be relevant in 10 to 15 years. We are moving in the direction of becoming a cashless society, with non-cash payments predicted to overtake cash ones in 2015. We haven’t yet reached the tipping point for a cashless existence to be considered a “social norm”, but 10 years ago mobile banking seemed a far off innovation; today it is commonplace. Retina scans, and finger and hand print identification are now a reality in Spain and Brazil, and will continue to become more mainstream. The next generation of banking customers are sophisticated users of technology from birth, and will have a completely different banking experience from the one their grandparents enjoyed. The challenge for banks will be to ensure their systems are secure and customers have uninterrupted access to funding. If not, their customers might start demanding access to old-fashioned cash again! David Sayer is global head of banking at KPMG.
The announcement by the Bank of England yesterday reconfirms the vital role cash plays in our day-to-day lives, as well the industry’s commitment to ensure payments are fit for the future. Last year, just over half of payments in the UK were made in cash, demonstrating how important it still is. During the economic downturn, for example, we believe people returned to cash to help them budget. And our forecasts predict that cash will be around for some time to come. Although its usage will drop by around a third by 2022, it will still play a significant role. Ultimately, our future payments landscape will be decided by consumer choice. Increasingly, we’ll choose to use a wider range of payment methods alongside cash, like mobile payments, cards or internet payments. Which method we choose will depend on the situation we’re faced with and what’s appropriate at that time. But claims that we are headed towards a cashless future are premature. Adrian Kamellard is chief executive at the Payments Council.