The world of money
The use of digital forms of money have skyrocketed in the past decade, from credit cards to debit cards to apple pay, the world of money is ever-changing technology wise.
The first ever coins were created in the 7th Century B.C in western turkey and have since then evolved into what we know today, with 167 different currencies around the world. However, as the world has technologically advanced, so has the money world. The first debit cards was introduced in the U.K. as early as 1987 and it wasn’t up until 2017 that the number of debit card transactions overtook the amount of cash transactions, which just shows that cash has always been popular still.
Some of the positives of using cash is that there is no third parties involved which means that it ensures peoples freedom. Cash also doesn’t require any other equipment, for example, no internet or electricity for online banking, or risk of losing your card. Cash is also a lot more secure, there is no risk of fraud or internet scams.
However, there are also some negatives that come with using cash. For example, carrying cash can make you vulnerable to theft, once your cash has been stolen its gone whereas having a debit card means it is a lot easier to cancel it if somebody else has it. Secondly with cash, there is no way to make any online purchases, and with the world now, makes only having cash very difficult. Cash offers no perks that cards do, such as cash back, no interest for the first 6 months and points for airmiles. Lastly, credit cards are a great and easy way to build credit, with cash there is not as easy of an option.
However recently, the bank of England reported that only one in five people still prefer cash as their main payment method but why has the use of cash decreased in recent times?
The Pandemic
During the pandemic, the UK lockdown resulted in most non-essential shops being closed and extra safety measures being put in place into the shops that remained open. One of these being card or contactless payments being preferred or cash payments not being accepted at all which resulted in only 17% of all payments being made in the UK in 2020 being with cash. However, in the post pandemic years, the use of cash has slowly started to make a return but still not to the levels it ever was. A reason for this is because covid safety measures have started to be reduced and slowly returning back to normal.
The pandemic also changed people's shopping habits, with nowhere to go a lot of people turned to online shopping to cure their boredom. The rise of Tik Tok also helped people to find new styles in the lockdown. With online retail shops such as ASOS and PrettyLittleThing becoming popular. ASOS alone profited from the lockdown, with their half-year profits being £106.4 million in 2021 which is a 253% increase.
Advances in technology
As the world advances in technology so does the world of money, with new forms of contactless such as google pay and apple pay, it means people don’t even need to take a physical form of cash or card out with them anymore, just their phones.
The Bank of England is also proposing the idea of a 'digital pound' which is a new type of money that will not replace cash and is known as a central bank digital currency or CBDC for short. This type of money will be sterling and have a stable value. The Bank of England have said that this new type of money is needed as people are not using cash as much and digital forms of payments are becoming more common.
Overall, the downfall of cash happened for many reasons including the pandemic and advances in technology. Although the levels of cash usage may never be the same as they once were, they are slowly creeping back up to pre-pandemic levels. As new form of money slowly come out over the years, could this be the end of cash, or is his thousands of year old form of money always going to be around??