In the last decade, the use of cash has begun to decline. The Covid-19 pandemic has increased the speed of this decline. It is at the point where many small businesses no longer even accept cash and with so many industries now moving online cash almost feels obsolete.
Carrying cash used to be a necessity. Nowadays, many people don’t even carry their credit or debit cards with them anymore. Everything can be done from a smartphone. This move towards digital ways of paying has an impact on our spending habits.
Online Activities
One way that our spending habits have changed is that the rise of online entertainment has pushed many people towards digital spending. We no longer feel the need to receive something physical in exchange for our money.
The most obvious example of this is in the entertainment industry. The vast majority of media consumed is streamed. Fewer people than ever are buying DVDs or CDs. Just as their payments are digital, they are content with a digital version of the product.
Other online experiences have flourished during the rise of digital payment methods. Virtual concerts and other live-streamed events, virtual museum tours, and specialist webinars have all thrived without cash.
Online casinos are another industry that has flourished in a cashless system. It would be an almost impossible business to run if online casinos had to rely on cash deposits.
Many online casinos have embraced the wide range of digital payment options. Consulting an online casino guide shows us that there are many that accept visa and other debit or cards, as well as many that accept PayPal. Some even allow you to pay using cryptocurrencies.
Spending More
The decline of cash makes it easier to spend more without thinking. Before we had digital payment methods, we had to get cash out at an ATM before making a purchase. Once the cash was in your wallet it was easy to see exactly how much of it had been spent.
Taking money out of ATMs also gave customers the option to see their balance. This was an easy way to keep on top of how much you were spending. Before you withdrew any money you could see exactly how much you had available to spend.
Of course, online banking makes it simple to check your balance but it makes it easier to ignore as well. If you aren’t being prompted from time to time to access your money, it can be easy to forget to check your balance.
Using a digital payment method is quick and doesn’t require you to physically have the money in your possession. You never actually have to hand over the cash which can make a transaction feel a bit like it’s not real.
This is especially true for making contactless payments. When all you have to do is tap your card on the reader, it almost doesn’t feel like you’re spending any money at all. It is very easy to lose track of how much you’ve spent if you only use contactless.
The increase in the contactless limit from £30 to £45 has made spending this way even easier. The proposed limit increase to £100 in October will make contactless an even more attractive option for shoppers.
The increase also means that we will no longer think of contactless as just for little purchases like it was initially marketed. It is now likely to be our automatic go to option for most of our payments.
Online Shopping
The decline of cash can be seen as tied to the death of the high street. With more people shopping online – often with massive e-tailers like Amazon – fewer people are going out to shop on their local high street.
In the past few years, we have seen many shops close that seemed to be fixtures of the British retail landscape. Well-established chains like Debenhams were bought out by online retailers, closing hundreds of stores and limiting shoppers’ opportunities to buy in person.
This move to online shopping is only possible because of the rise in digital payment methods. It certainly would be possible to have next day delivery if you had to mail a check to Amazon and wait for them to cash it before shipping your order!
Online shopping makes up a major percentage of our spending. We have adapted to some of the inconveniences it creates, like having to buy clothes in multiple sizes and then return the ones that don’t fit because in general, it is more convenient for us.
Even groceries can now be bought online, freeing people from the trip to the shops. Unlike some trends in cashless spending, doing grocery shopping online actually helps people to spend less money.
Everyone is familiar with the mistake of going to the shops while hungry or of not having a list and aimlessly wandering the aisles. You generally end up with far more in your basket than you planned.
Buying groceries online allows you to shop without the tasty distractions of the pastry aisle right under your nose. It is easier to work from a list and to stick to it when you aren’t confronted with the special offers at the end of each aisle.
Cash will probably never truly die, many in the older generations feel uncomfortable with online purchases and others just prefer to use cash. Digital forms of payment, however, make our lives easier even if they do occasionally blind us from how much we’re spending.