Who Wins When Consumers Go Cashless?

U.K. experiment puts credit/debit-only society to the test

Steve Holtz, Editor in Chief, CSP Daily News

Cashless street test

MANCHESTER, England -- Last month, an experiment in Manchester, England, transformed a block of retail stores into the first "cashless" street. For one day only, the majority of the shops and businesses stopped accepting notes and coins, forcing customers to pay with credit or debit cards. The experiment was organized by card-payment provider Handepay to see if consumers are ready for a cashless society.

In announcing the experiment, Handepay noted that the use of cash has dropped 14% in the past five years in England, and that experts predict the end of physical currency inside 20 years. “This will be a reality for many consumers with developments in card and mobile payment making it easier than ever to get what you need without any cash in your pocket,” Handipay stated.

In actuality, there was mixed reception to the experiment, according to an ATM Marketplace report, which noted that most retailers, which included bars, restaurants, a bakery, hairdressers, a convenience store, a deli and other stores, still gave customers the option to pay in cash.

While hardly proving the theory that consumers could soon live without cash, the ATM Marketplace report--which questioned whether the test was just a publicity stunt--focused on just who would benefit from such an economy, consumers, retailers or the payment-services providers.

A brief summary of the report’s conclusions:


“By removing the option to pay by cash, you are giving the consumer no choice at all and removing an alternative payment method should card systems go down. … Benefit: None.”


If businesses restrict customers to purchasing by card only they are losing out on those customers (and the revenue they bring) who want to pay by cash. … Benefit: None.”

Credit Card Payment Providers

“Finally a winner? There is no denying that a cashless society will benefit credit-card-payment providers. By removing cash from the payment decision, consumers have no choice but to use cards. This results in these companies receiving a fee from the business after every swipe. Benefit: More card transactions, more profit—at the expense of businesses.

Click here to read the complete ATM Marketplace report.

Steve Holtz, CSP/Winsight By Steve Holtz, Editor in Chief, CSP Daily News
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