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Is CASH going extinct?

23/01/2019

Companies are starting to refuse physical cash as payment as the digital revolution makes notes and coins obsolete.

Many firms around the world are beginning to shun cash in preference for a future dominated entirely by digital currency. The concept of rejecting cash payments has become increasingly common around the world.

In January, Starbucks in Seattle stopped accepting the form of payment and many pubs in the UK have the same approach. Drybar, a chain of blow-dry salons, has also turned its back on cash.

A traditional pub became the first in Britain to go cashless back in September. There are no tills at The Boot in Freston near Ipswich, Suffolk, and customers must pay by card or phone.

There is no minimum spend per transaction. The 1530s pub had been derelict for nine years before new landlord Mike Keen took it on and it was refurbished. Mr Keen, 49, said: ‘The benefits of going cashless are huge.’

He said he researched other cashless businesses before opening and found few negatives. The landlord said some delis had gone cashless and at least one bar in Manchester, but no traditional pubs before The Boot. ‘Cash has always been a pain,’ he said. ‘You’ve got problems with theft.

‘The banks charge a fortune for you to pay cash in, they take a cut of everything you pay in. ‘You have to organise change, go into town, park, queue up which is another security risk or pay a firm like Securicor to pick it up. ‘The bottom line is so hard we have to take advantage where we can.’

He said the decision to go cashless means his insurance premiums are lower as cash is not kept on the premises.

The pub, which has a 12-seater cinema in an outbuilding, is focused on food and Mr Keen said there was around a 60-40 split on food versus drink sales. He said card payments cost him up to 1.5 per cent per transaction.

Sweden is leading the way for a cashless society but the country is being urged to keep producing physical cash by financial authorities. Half the nation’s retailers are expected to completely reject cash by 2025.

Sweden’s central bank is experimenting with a central online currency, known as e-krona, to keep firm control of the money supply.

‘When you are where we are, it would be wrong to sit back with our arms crossed, doing nothing, and then just take note of the fact that cash has disappeared,’ said Stefan Ingves, governor of Sweden’s central bank, known as the Riksbank.

‘You can’t turn back time, but you do have to find a way to deal with change.’

The revolution away from cash is startling among millennials and Gen Z individuals as almost 95 per cent of their purchases are made via debit card or a smartphone app called Swish, a payment system set up by Sweden’s biggest banks.

A trial done by Ikea found that less than one per cent of all transactions used cash and yet employees were spending 15 per cent of their time taking, counting and handling it.

Source: Daily Mail