UK firms may be offered a trial by payment company Visa in future to encourage the use of cards instead of cash payments.
The Daily Telegraph had reported that Visa vowed to “put cash out of business” and to ensure every item across the UK is purchased using a debit card, credit card or a form of digital payment.
But in a statement to Moneywise, Visa says: “Visa Inc. announced a cashless challenge where interested US small businesses can submit their stories of what going cashless might mean to them, their employees and their customers. Visa will select 50 of those entries to receive incentive funding of $10,000 to help those small business with their drive to cashlessness.
“We told The Daily Telegraph that we hope to offer a similar challenge to those merchants who are interested in other countries, including the UK. At this time, we do not have a firm plan on when such an initiative would be available in the UK.”
James Daley of consumer group Fairer Finance comments: "It is easy to categorise it as a bribe, but ultimately Visa is incentivising companies to do away with cash, and that's not the job of companies like Visa.”
Card payments overtake cash
In 2016, more than half of the 38.7 billion UK payments were paid for using credit or debit cards, according to Payments UK.
Only this week the British Retail Consortium revealed that for the first time ever the volume of retail purchases made by card now accounts for more than half of all customer transactions.
But mobile payments are also on the rise. James Frost, UK chief marketing officer of payment of Worldpay, says: “Contactless cards have paved the way for rapid adoption of mobile payment systems, driving investment in infrastructure and familiarity among consumers. Today one in five of us will use the technology at least once a day, rising to a third of people in London.
“But as people get more used to paying for goods on their smartphone, mobile’s ability to bridge more effectively across online and offline retail channels will increasingly threaten the future of the traditional payment card.”
Mr Frost adds that more than half of UK shoppers say they’d “happily leave their wallet at home and pay for everything on their smartphone instead”.
However, for some people, cash is still a vital part of life, especially amongst some elder generations, whose preferred method of payment is cash, rather than card.
The Bank of England’s chief cashier, Victoria Cleland, said in a speech on the future of cash in June that 2.7 million people in the UK rely almost entirely on cash, which is 5% of UK adults.