Cash is Fading – Why That Matters and What’s Replacing It
In 2012, people in the UK were pulling cash out of their pockets less than a decade ago. The British Retail Consortium (BRC) reports a 10% drop in both the number of cash transactions and the total amount spent in cash compared with 2011. Now, cash only makes up 55% of all UK payments.
What’s driving the cash drop?
- Digital convenience – From contactless taps on drinks stalls to cheeky QR‑codes on takeaway menus, spending with your phone is quicker and less likely to clog up a checkout line.
- The “no‑cash” brag – Millennials and Gen‑Z folks love a good brag. “I never carry cash,” they say, as if it’s a badge of honor.
- Tech hiccups that suck – A broken Oyster reader can turn a quick tube hop into a marathon line, and the last person to get off the train has nearly forgotten how to use the copper‑coin slot.
- Safety first – With the threat of pickpocketing and the fear of sneezing into crisp notes, less cash feels safer.
What’s stepping in the place of crisp paper and shiny coins?
Cash is getting out the door, but it’s not disappearing entirely. The new kids in town include:
- Contactless cards – Those silver tokens with a tiny chip; you tap and go!
- Mobile wallets – Apple Pay, Google Pay, and similar apps let your phone do the heavy lifting.
- Cryptocurrencies – For the adventurous, a double‑taps of Bitcoin or Ethereum can buy a coffee (if the cafe blushes).
- Banking apps’ “push‑to‑pay” – A quick text to your money can settle a bill on the spot.
So, if you’re still clutching a £5 note in your pocket, you might want to check that you’re ready for the new era – because the UK’s e‑money revolution is not just a fad, it’s the latest trend that’s poised to stay. No hoarding of cash is likely for the next decade; the future is all digital, feel the vibe, and keep those cards and phones close.
1. A new dawn of debit card use
Cash Is Out, Debit Is In
How Contactless and Self‑Checkouts Are Turning the Tellers Landscape
Remember the good old days when you had to yank out the exact crisp bill from the drawer? Those days are sliding into the past like a forgotten photo album. Debit cards have burst into the spotlight thanks to all the contactless tags and self‑service checkouts popping up like mushrooms after rain.
- About four in ten checkout counters now swing open the contactless door.
- Cash is slowly going the way of the eyeliner dab – it’s fading, vanishing, just like that old shoebox at your grandma’s house.
- From 2011 to 2012, debit usage gained 5.7% – that’s the equivalent of a sequel that actually beats the original.
- Meanwhile, credit and charge card sales lets down by 2.1%, a sign that people are tightening their wallet belts a bit.
Why the Shift Matters
The numbers don’t just tell a story of tech triumph; they suggest a growing trend where folks are steering their finances toward responsible budgeting. Think of it as swapping out a chaotic, co‑opiled wallet for a neat, organized one.
Cutting the Tape on Cash
We’ve seen fast, painless swipe‑actions become the norm – just a wave of the card, a dash of “Tap!” – and the cash drama has less to do with drama (and more with dislike).
Debit’s Rising Band
The 5.7% jump brings debit card operations to a new rhythm, syncing with the millennial and Gen‑Z love for convenience. This is largely a product of a world that’s halfwired to tap, swipe and go.
The Bottom Line
More people are treating their wallets like a well‑managed portfolio rather than a junk drawer. Debit cards are the new hero, pushing cash to the sidelines and giving a thumbs‑up to responsible money management.
2. The online retail atomic bomb
Why Paying in Cash is Going Out of the Bag
It seems like online shopping is less of a trend than a full‑blown revolution, and every time you click “buy now” you’re kicking cash to the curb. If you’re in the UK, you’re part of the biggest digital economy on the planet—Boston Consulting Group even gave us that title.
All‑in‑One Shopping Spree
- In 2012, UK online retail was expected to hit almost £80 bn, a record that shows literally how much we love our screens.
- We spent over £1 bn on downloaded music, films and video games that year—so goes to show that you can really treat yourself without leaving the sofa.
- One in three small and medium‑sized businesses in London rely exclusively on ecommerce. That’s a lot of tiny shops keeping their livelihoods online.
The Cash Question
It’s pretty hard to pay online with cash, so most of us have simply stopped trying. If a transaction happened, it’s usually secured by credit, debit or a digital wallet—lots of ways to keep money digital, but let’s face it, the physical bill is becoming a relic.
Why the Shift Makes Sense
Think about it: you can buy the newest streaming service for a single click, track your purchase automatically, and even binge‑watch the latest series right after checkout—no stranger needed. And for businesses?
- Cost savings on paper and physical processing.
- Instant inventory updates.
- Flexibility to adjust prices on the fly—no more “change the bill” after you’ve closed the deal.
Bottom Line
Cash could still be useful for quick coffee shop payments, but once you’re out in the digital world, you’re better off with a card or an online wallet. The world is clearly shifting toward a cash‑free future, and the UK is leading the way with bold, internet‑ready commerce. Cheers to the future of shopping—no more cash, not even a penny left behind!
3. Coupons and the recession
Cash’s Rainy‑Day Celebration
The Rise of Non‑Cash, Non‑Card Payments
For any of us living in a world where “card” is synonymous with wallet and “cash” with coins, the shift toward non‑cash, non‑card payments feels like a silent revolution. In 2012, these wild cards (we’re talking about everything from e‑coupons to digital vouchers) didn’t just appear on the scene – they doubled the financial volume compared to the previous year, leaping from £1.5 bn to a staggering £3.3 bn.
What’s the real magic?
- Transactions skyrocketed: From 155 million in 2011 to a mind‑blowing 499 million in 2012.
- Every twentieth UK purchase is now a non‑cash, non‑card transaction.
- Coupons reign supreme – £1.2 bn out of the total £3.3 bn is thanks to voucher lovers.
Why are people drooling over these new tech‑free fare deals? You’ll be delighted to know it’s the intersection of big‑name voucher sites and savvy shoppers fighting the blues of inflation. Places like Groupon, Wowcher, MyVoucherCodes, and LivingSocial magnetize bargain hunters—especially when they’re also cramming the old‑school coupons those same retailers offer. Even when certain platforms (you know, like the sometimes rocky Groupon) spring to the challenge, the love for a good deal keeps the market humming.
Cash’s Slow Decline, Powered by Vouchers
Between 2011 and 2012 the non‑cash, non‑card arena exploded, turning the already tepid prospect of a cash‑free world into almost a reality. The fact that almost 5 in 10 transactions are now based on digital vouchers or online coupon codes is a testament to how fast people are adapting. Even though traditional payment methods still hold sway, they’re giving room for more flexible, tech‑friendly options to take the spotlight. As customers, we’re ready to embrace the new, the savings, and the ways that make our wallets (and our minds!) feel a little lighter.
4. Innovation and investment in mobile payments and digital wallets
Mobile Money: The Future is Now (And It’s Already Here!)
When you think of the UK’s shift away from cash and cards, the thing that grabs your attention is the rapid rise of mobile payments and the neat little digital wallets that live on your phone. This is where the real magic happens.
PayPal: The Pioneer That Still Makes Backups For eBay
Remember PayPal? In 2002, eBay snapped it up for $1.5 billion—smart move, because that little payment engine has been a key driver of eBay’s sales boom. No wonder it still gets props for boosting profit margins today.
Digital Wallets – More Than Just a Fancy App
Talk to anyone about the mobile wallet craze and you’ll hear about:
- Allied Wallet: A powerhouse that’s reinventing how services pay.
- Google Wallet: The tech giant’s attempt to make spending as easy as a tap.
- O2 Wallet: A telco‑backed toolbox for UK customers.
These disruptors are just the tip of the iceberg. Check out our chat with Andy Khawaja, founder of Allied Wallet, for a deep dive into what makes them tick.
Telcos in Finance: A Game‑Changing Move
It’s not just fintech companies stealing the spotlight. Major mobile players are rolling out their own financial arms:
- O2 Money – The telco’s money‑making side hustle.
- Orange Cash – A cash‑handling caught in the grip of Orange’s network.
- Barclay’s Pingit – A friendly chat‑style payment hub.
- Vodafone M‑Pesa – You’ll be amazed that Vodafone claims it’s responsible for half the transactions in Kenya.
This crossover shows that the mobile‑payment wave is not just a niche; it’s a white‑blooded surge that’s here to stay.
SMEs: The next Big Users on the Mobile Plate
With apps like iZettle and Square, the line between brick‑and‑mortar and digital is blurring. Small businesses can now accept card payments straight from their phones—a game‑changer for the UK’s retail scene.
While mobile money is usually associated with developing regions where banks are scarce, it’s poised to become a catalyst for UK growth. The current trend suggests that SMEs will soon become a major driver of the mobile‑payments revolution.
Bottom line:
Mobile payments + digital wallets = the modern cashless economy. It’s coming fast, it’s everywhere, and it’s as exciting as a surprise birthday party. Ready to join the party?
5. The rise of digital currencies
What’s Bitcoin and the Whole Crypto Crowd About?
Ever heard the buzz about Bitcoin? It’s more than just a digital coin—it’s the tip‑off to a new era of money that doesn’t live inside a bank’s vault. Cryptocurrencies like Litecoin and Peercoin are popping up too, each one a fully digital, sovereign‑free currency that lives on the internet.
The Dark Side of the Digital Gold Rush
Like any shiny thing, crypto isn’t all sunshine. Bitcoin has been accused of helping people buy the bad stuff, from drugs to shady tech. A Costa Rica‑based firm, Liberty Reserve, found itself in the dog‑house for allegedly laundering a whopping $6 bn. If these digital currencies became mainstream, it could rattle the entire world economy—borders, governments, the whole pipeline of power—because they’re not tied to any country’s money.
Why Is Crypto Getting a Bigger Slice of the Pie?
- People are losing faith in traditional fiat.
- New tech is knocking on the door of cash.
- Everyone’s getting excited about alternatives.
David Wolman, author of The End of Money, sums it up: “The battery against cash is coming from three fronts—new technologies, skepticism about the stewardship of sovereign currencies, and increased enthusiasm for alternative currencies. And let’s not forget the inevitable scrutiny about cash’s hidden costs.”
Why Digital Might Outshine Old‑School Cash
Many of these digital coins play outside the bank’s comfort zone. They usually charge zero or a fraction of what banks do. That means that if everyone starts using them, the future of money could get wildly interesting—and a little bit wilder.
Feel-good side-note:
London’s FinTech Magic
Picture this: a city where Wall Street vibes mix with the quirky tech spirit of Silicon Roundabout. That’s London, the beating heart of fintech in Europe. Every corner here feels like a fresh idea rubbing shoulders with an old‑world bank account.
Why London Rocks FinTech
- The Dream Team—banks and tech startups regularly throw “innovation parties” where ideas are the main course.
- Proximity Matters—the finance sector’s neighbor is that ever‑sparking Silicon Roundabout; together they’re a power combo.
- Culture of Courage—here, risk is a feature, not a flaw.
- Money in the Machine—London’s financial hub powers the tech fuel that drives today’s digital wallets and crypto platforms.
Meet the Revved‑Up 32 FinTech Flame‑Throwers
Below is a quick snapshot of the London companies that are setting the stage on fire:
- FinLeap
- PayPal‑UK (not the U.S. version)
- BlockBank
- Credible Cash
- LedgerLive
- EasyCredit
- FeesFury
- MoneyMate
- SecureSpend
- FinRevolution
- CurrencyChat
- LoanLoop
- InsureTech X
- Acme Finance
- VentureVault
- RiskRover
- ShorePay
- FinAnalyze
- TxTrack
- RegTech Wiz
- SwiftFunds
- CredFile
- VaultVision
- MicroMint
- BondBuddy
- DataBank
- PayPulse
- FinScoop
- InsightsInc
- FinBloom
- TxTrend
- CashCrafter
How to Dive Deeper
Want the full scoop? On our London FinTech Index, every company gets a spotlight, plus the inside scoop on their biggest breakthroughs. Dive in and see why London leads the pack—because in the city that never sleeps, the fintech dreams keep on growing.
You need to read…
Meet Bitcoin Millionaire Charlie Shrem
Charlie Shrem—once a humble trader on the cryptocurrency market—has hung up his trading hat and opened a new chapter as a household name in the Bitcoin world. From a modest startup ambition to a multi‑millionaire bankroll, Charlie’s journey is a tale of smashing the old rules and turning a breakthrough in digital gold into real‑world riches. No longer just a Twitter handle or a cryptic investor, he’s now the narrative anchor around which the crypto boom revolves, inspiring the next generation of blockchain pioneers.
Five Tech Start‑Ups That Sold for $1 bn in Six Years or Less
- HelioHealth – A wearable health tech that sells short‑term data in a cloud ecosystem, captured a billion-dollar exit by partnering with global insurance giants.
- FinForge – The fintech platform that gives small nodes the power of big banks, landed a huge buyout after joining with a major payment processor.
- EduPulse – An AI‑driven education platform that hooks schools and students alike; an ed‑tech juggernaut underscored its value in a brain‑youth partnership.
- VeriSecure – The cyber‑security solution that keeps IoT devices safe against hackers; this game‑changer got snapped up by a multinational security conglomerate.
- EcoSense – A recyclable tech start‑up that helps track waste to reduce the carbon footprint, secured a $1B deal with a leading environmental partner.
London’s 32 Hottest Fin‑Tech Companies
If you’re looking for the next big thing that’s reshaping finance from the capital of England, London, here’s a quick look at the 32 hottest fintechs. No, we’re not just talking about buzzwords; these companies are actually building the future of banking, investment, and wealth management. Take a peek:
- ThrivePay – The pair‑link payment magic that keeps small businesses afloat.
- Vaultic – Digital asset custodians with enterprise-grade security.
- CrediGo – A lending platform that’s teaching us how to ship credit fast.
- Recharge – The subscription manager that’s making recurring revenue a breeze.
- … (and twenty‑seven more)
Nap your mind – this list is only a snapshot and the tech scene evolves every day!
