This is the whopping £9 billion cost of cash.
Thank god, cash is disappearing. It’s being replaced by cards, contactless and digital payments, but while it lingers around it’s costing us billions.
Between theft, human error, and the time it takes to carry cash to the bank, accepting coins and notes is costing British businesses alone more than £9bn a year.
That’s according to Sage Pay, which found 56% of small businesses spent an hour or more every week counting and transporting cash, while 34% admitted to losing cash because of mistakes and a quarter said staff had stolen cash from them.
Now digital money isn’t perfect either, just ask the thousands of unfortunate Tesco Bank customers this morning who found themselves out of pocket after Tesco’s huge hacking.
But ultimately digital payments are faster for consumers, (generally) more secure and far more efficient for businesses.
That’s why we should look to scrap cash, not today or tomorrow, but at some point in the near future.
Sounds crazy? I’m not the only one who thinks so.
Andy Haldane, the Bank of England’s chief economist, last year said cash was approaching a “tipping point” and said its abolition could even help central banks as negative interest rates wouldn’t lead to people withdrawing their money from bank accounts as cash.
However, he hedged these comments by adding that cash will continue to be used for decades.
“The demand for cash, whether it’s paper or polymer or digital, will be down to the decision of individuals, not down to the decisions of central banks,” said Haldane.
He’s not the only one who’s advocated scrapping cash.
Citigroup chief economist Willem Buiter and Ken Rogoff, the former chief economist at the International Monetary Fund, are both cash abolitionists, claiming its removal would take a huge amount of friction out of finance.
And while no one trusts economists, clearly we do all agree with them because we’re avoiding shops that only take cash, contactless payments are booming, and card transactions have more than overtaken cash.
Cash is simply an analog relic living in a digital age, which isn’t really fit for purpose anymore.