Does Great Britain Risk Becoming Completely Cashless?

In London, there is a dominance of high-tech banks, crowding traditional financial institutions out of the banking sector. It is good enough to use the application, fill an online form, which takes just a few minutes — and — it’s done! In a couple of days, a debit card arrives, and you can make purchases safely. Payment via smartphone is the last frontier overcome by the digital economy and money. The UK is the European avant-garde in the field of electronic payments.

The inhabitants of Albion have long been used to everyday payments in electronic form. Even in 2007, everyday cash payments accounted for 60% of the total cash flow, and now their share has been reduced to 30%. Comparing to Italy, where they traditionally prefer physical money, the ratio between cash and non-cash payments is 65% in favor of cash.

In the UK, cashless payments are stimulated by chain stores. A lot of them already refuse to accept cash at all. It depends on two factors: the structure of the retail trade and the type of financial statements. In the UK, there are practically no SMEs like family stores, while in Italy, this type of family business is very common.

Small shops have small money turnover, they are serviced by an accountant, whose services are of little income. This accountant is a self-employed worker who simultaneously serves several local SMEs. In addition, a family that owns a small business is more likely to get cash earnings at the end of the working day. The same can not be said about the anonymous cashiers of large chain stores like Tesco in the UK. Networkers with their huge turnover benefit by paying with electronic money, because it reduces the costs of collection.

However, the reducing of the share of cash flow is just one case, but crowding cash out of circulation is another matter — especially considering its elimination as a means of payment. This is what the United Kingdom is taking by leaps and bounds. If the current trend continues, by the year 2027 the share of cash in trade will fall to 16%, and then the cash will eventually disappear.

This awareness caused a real panic among the leaders of the Bank of England. This British public law institution, which serves as the central bank of the United Kingdom, has launched a campaign to encourage and promote the use of cash in everyday settlements. For these purposes, a new plastic banknote of 50 pound sterling has been issued, and next year it is planned to issue a 20 pound banknote, where it will be possible to add a personal signature.

As some local observers ironically point out, the withdrawal of cash from circulation jeopardizes the very foundations of the British monarchy. The thing is that along with the disappearance of banknotes, the imprinted face of the Queen will fade out.

The article is written by Vsevolod Gnetii, a correspondent of Bitnewstoday in Italy.

Image by Independent UK