How to survive the end of cash

Cash is no longer king. Over recent years fewer and fewer transactions have been made with cash. The most recent figures show coins and notes are used just 34% of the time, down from 63% a decade ago. And usage is predicted to fall to just 10% in 15 years.

Instead we’re paying with cards and digital technologies. Some of this is down to user choice, with contactless cards and smartphones making spending faster and more convenient.

But it’s also being forced upon us. Some retailers are refusing physical money as they can avoid the high bank charges levied at them for handling cash. Meanwhile it’s harder to get your hands on notes as cash machines and banks disappear from the high street. And these are trends which are likely to increase in the coming years.

This could be bad news if you still primarily use cash, whether that’s how you pay your bills or how you budget. For some, cash is just what you know. For others, cash is a necessity—especially when going digital is the alternative.

As a result this move towards cashless society makes many useasy. But should it? Here’s what you’ll need to do to make sure you don’t get left behind.

 

The main way people pay now is with a debit or credit card, and as a result you’re likely to find more businesses—from cafes to car parks—going card only and rejecting cash as payment.

A huge part of why this is possible is contactless technology. “Contactless” simply means your card has a chip installed that allows you to tap your card on a reader to pay for anything under £30.

Some find this a bit scary, and worry about an increased chance people could steal their money. But fraud levels via contactless are very low. There’s actually greater protection against theft as you can often claim stolen money back. You don’t get that if you mislay a tenner. You shouldn’t worry about getting double charged either. Even if you accidentally tap multiple cards at once, the money will only be taken from one.

Contactless can make life easier too. Not only is paying at the till faster, there’s no need to remember a PIN or find your glasses to read the numbers on the pad—though larger transactions will still require you to enter your four digit code. There’s no minimum transaction amount.

The majority of banks now automatically issue contactless enabled cards, so it’s likely you’ve already got the ability to use this. You can even choose to go cardless with this technology. Most smartphone handsets include a chip which you can connect to a digital wallet. These have added security such as fingerprint sensors to approve payments—the kind of technology we’re likely to see more of in the future.

 

Even if you embrace paying with cards, it’s likely you’ll still need to use cash at times. Maybe it’s to pay the window cleaner or to spend at a local club. Hopefully you’ll still have a bank branch or cash machine near you, but with these disappearing fast from our high streets, it’s worth knowing the alternative sources of cash.

You can take out money from most bank accounts at the post office. The daily limit is the same as you’d have at an ATM, but that should be enough for most people. You can also still ask for cashback at supermarket tills. With both you’ll need your debit card and PIN.

 

It’s well worth giving online banking and shopping a try. It might take some getting used to, but you’ll ultimately have greater control of your money. You can often get discounts on bills and there are tools to help you shop around and pay less.

If you don’t have access to the internet, or you’re really not confident with digital services, then you could look to move your bank to one which specialises in phone banking—though be prepared for long waits.

Even without online banking you can help mitigate a loss of access to cash when it comes to bills by automating payments.

For anything regular it’s worth setting up direct debits and standing orders. These move the money from your bank account electronically on set dates. You should be able to set these up over the phone or via the post with most providers.

If you rely on family, friends or carers to help you with things like shopping, then you can even set up a standing order via your bank to send them money on a regular basis. That prevents you from having to hand over access to your accounts or tell them your card’s PIN—though if that’s something you think you might need to do then talk to your bank to see what options are available.

 

If you’re moving more of your finances online and away from cash, then just be aware that there will be new ways of scammers trying to get your money. Be extra careful of any emails you receive—they might not actually be from your bank—and don’t share your details with anyone. When using cards, always make sure you check how much you’re being charged and ask for a receipt too. Likewise, keep an eye on any online payments, whether one-off purchases or those regular payments. If you spot anything that seems wrong, get in touch with your bank straight away.

 

As a budgeting tool, cash can be important for keeping control of your money. The less you use the cash the harder it is to keep track. And that makes budgeting even more important.

In some ways, it’ll be easier to tally everything up as unlike cash, you can also see every transaction on your bank statement when you’ve paid with your card. This works best if you activate online banking as you don’t have to wait for a monthly statement.