The increasing number of businesses using cards over cash could prompt some companies in the U.K. to stop using cash altogether after hundreds of years with that as the primary mode of payment.
Contactless transactions using commercial credit cards surged nearly a fifth higher in 2019 than they had been prior, according to the U.K. subsidiary of HSBC, rising 24 percent. All card payments, including both debit and credit, were up 20 percent, according to Yahoo Finance UK on Thursday (Feb. 13).
By contrast, cash advances from commercial credit cards fell 14 percent last year, another nail in the coffin for cash overall.
The use of “petty cash,” or cash set aside to use for small things like groceries, is also falling out of favor with the public, and some companies might eventually phase it out as a mode of payment, instead favoring commercial credit cards.
Tom Wood, head of global liquidity and cash management at HSBC U.K., said, per reports, the reasons for many people to stop using cash came down to security and convenience. The use of cards, he said, makes it easier for many people to keep track of precisely what they’re spending on things like daily travel expenses.
Commercial cards were used the most at places like petrol stations, hotels and building supply stores, stats from HSBC show.
Cashless stores have received some pushback in the past, such as in New York City, where criticism of the model led to the city’s council to pass a ban on stores not allowing cash to be used. The reasoning, according to critics, was that forcing people to only use credit or debit could disenfranchise and disadvantage low-income communities and communities of color.
But the cashless trend has been a boon for companies like Visa and Mastercard, whose stock rocketed up 50 percent in the last year. The growth was due to the prominence of online shopping and other cashless modes of payment.