Which year will the UK go cashless?

[12LDA28C]

Could card readers that belong to a specific bank all go down in case of one of those cyber attacks? Is it possible for all readers to go down regardless of bank?

When in Iceland last year I needed to pay for fuel at the only petrol station in the middle of nowhere. When I tried paying at the pump with my card, the card reader was displaying an error message, so I was unable to dispense fuel. When I went to the kiosk to enquire what was going on I was told the wi-fi/payment system had failed and they could only accept cash. Fortunately I could pay for some fuel at least as I had money in my pocket. I would have been stuck had I had no cash on me.

 

[simonw]

When in Iceland last year I needed to pay for fuel at the only petrol station in the middle of nowhere. When I tried paying at the pump with my card, the card reader was displaying an error message, so I was unable to dispense fuel. When I went to the kiosk to enquire what was going on I was told the wi-fi/payment system had failed and they could only accept cash. Fortunately I could pay for some fuel at least as I had money in my pocket. I would have been stuck had I had no cash on me.

When I was Iceland a couple of years ago, I only saw one person pay by cash - once in a fish and chip shop. It is very rare for people in Iceland to have cash.

 

[zero]

My local Morrisons had a series of extra-large self-service checkouts installed last year or so, which is great, but as I said earlier, I think that card-only self-service tills need to be separate from cash tills, or abolished altogether.

That one is true, in my local Sainsburys the left bank is card only whilst the right side is cash/card, but there’s only one queue, so when you’re wanting to pay cash you get to the front of the queue, a card one opens up, you stand there and someone behind you says “there’s one over there mate”, you shouldn’t have to go telling people in the queue behind you which payment method you’re using as it’s nobody else’s business except you and the self checkout attendant

Are you (@joieman) saying that in some supermarkets there are self-checkouts that are capable of accepting cash, but they've turned it off?

I haven't noticed this in the UK (though I haven't been in the UK for 2 months), if the machine has the coin slot and it is working at all, it will accept cash. If I want to use cash (which I only do when I want to dump 1p/2p) I just move close to the cash ones once I get to the front of the queue. If there is a free card only machine, I gesture to those behind me to go ahead.

I haven't needed to explain why to anybody, I think it would be obvious to anyone that I am waiting for the cash ones. While I agree it's nobody else's business, it's not like they can't see that I am dropping coins into the slot if they are being busybodies.

One negative for cashless is both my credit and debit cards are rejected on buses so I always have to carry some cash with me for that alone. Worries me if buses went totally cashless that I could be stranded somewhere if by card fails. As far as i can see buses can't do PIN that happens in shops if the card is rejected.

On Manchester's buses (Bee Network) I can't see anywhere where a card can be entered and PINned; I'll ask a driver, maybe there is a method. Didn't mind my debit card not being accepted as my credit was always working, now that doesn't!!

I'm not sure why a card that previously worked on a bus would stop working.

In London I have experienced that new cards I receive in the post do not work on TfL until I have first inserted them into an ATM and used the PIN, no need to withdraw cash. This happened both on buses and at ticket barriers.

Also on buses that don't do tap on tap off, placing £2 in the driver's tray is almost always faster than using card.

In Lund, Sweden in 2017 the buses had full card readers which was a bit of a surprise to me, the driver started driving while I was entering my PIN and my card fell out, then the connection failed, he had to wait for a red light before he could reset the machine, then he started driving again and I fell over. It took about 10 minutes to buy a ticket. In Dubrovnik in 2022 the buses had full-size cash tills like in shops, with the compartments for each denomination of note and coin (they were using kuna so 6 coin and 4 note denominations)

When I was Iceland a couple of years ago, I only saw one person pay by cash - once in a fish and chip shop. It is very rare for people in Iceland to have cash.

That may be true but in my experience, unlike in other Nordic countries pretty much all shops in Iceland accept cash. I last went to Iceland in 2017.

My friend visited Iceland a few weeks ago and was able to pay by cash everywhere except for his hostel. (The same one that I mentioned on here who also paid cash almost everywhere on his visit to Canada.) He said that he saw plenty of tourists paying cash too.

 

[joieman]

Are you (@joieman) saying that in some supermarkets there are self-checkouts that are capable of accepting cash, but they've turned it off?

I haven't noticed this in the UK (though I haven't been in the UK for 2 months), if the machine has the coin slot and it is working at all, it will accept cash. If I want to use cash (which I only do when I want to dump 1p/2p) I just move close to the cash ones once I get to the front of the queue. If there is a free card only machine, I gesture to those behind me to go ahead.

I haven't needed to explain why to anybody, I think it would be obvious to anyone that I am waiting for the cash ones. While I agree it's nobody else's business, it's not like they can't see that I am dropping coins into the slot if they are being busybodies.

As in they removed the cash function altogether. Meaning in some stores such as my local Tesco that they replaced some of the machines entirely.
I fully agree that it isn't anyone's business whether you're paying by cash or card. But it also defeats another reason why people use them, which is that they want to avoid human interaction!

 

[zero]

As in they removed the cash function altogether. Meaning in some stores such as my local Tesco that they replaced some of the machines entirely.
I fully agree that it isn't anyone's business whether you're paying by cash or card. But it also defeats another reason why people use them, which is that they want to avoid human interaction!

OK, but if you want to avoid interaction then you should only go when the store is empty in which case there wouldn't be a queue at the self checkouts anyway... how do you avoid others when they keep getting in your way in the aisles?

 

[joieman]

How do you avoid others when they keep getting in your way in the aisles?

I think that would be rather extreme, and I think such people would probably have their shopping delivered to their home if they are that antisocial. I was kinda thinking something more like a "not in the mood to talk to anyone today" sort of person rather than someone who avoids people altogether.

 

[DoubleLemon]

I always carry cash and on several occasions it's saved my bacon because other payment systems have gone down. Never carrying cash seems pretty foolish to me. Modern so-called 'technology' is not infallible.

So you keep a backup everything else in case a modern system goes down? Do you still keep your old washing machine just in case your current one breaks?
Its not "so called" as you put it - Its a real thing.
Not one person would ever claim it to be infallible. Everything breaks down - technology driven or not.
there are companies out there guaranteeing an downtime of less than 1 second a year. But the money it costs is staggering and its usually not worth it. You cant pay by card for a few hours in a single store. No one is going to die.

 

[Hadlow Road]

In London I have experienced that new cards I receive in the post do not work on TfL until I have first inserted them into an ATM and used the PIN, no need to withdraw cash. This happened both on buses and at ticket barriers.

I believe that new or replacement cards must either be authorised/woken up over the ‘phone, online or via a PIN transaction. This is, presumably, intended as a protection against interception and theft?

 

[renegademaster]

Do you still keep your old washing machine just in case your current one breaks?

I keep plenty of old appliances tucked away in case my current fails. Having a tenner tucked into your phone case is a bit easier than finding a space for a spare washing machine too.

 

[PeterC]

UK supermarkets need more self-checkouts designed for trolleys

Far more sensible to use scan as you go.

 

[DelW]

So you keep a backup everything else in case a modern system goes down? Do you still keep your old washing machine just in case your current one breaks?

What a strange argument - because it isn't practical to have a backup for *everything*, then no-one should have a backup for *anything*.

If having a plan B is simple and low cost (like cash in case your card payment fails), why wouldn't you have it available?

Last week I took some family members out for lunch. When I came to pay, my card was declined* (for unknown reasons). Had I not had enough cash on me, it would have been embarrassing having to ask my relatives to pay for "my treat".

*Both contactless and chip and pin failed. The card has subsequently worked normally. This was before the publicised Visa problems.

 

[Garmoran]

My wife and I run a burger van and use Sumup to accept card payments. We prefer card payment as the money goes directly into the bank without needing to be counted and it reduces the number of times when we run out of change due to customers reluctance to check if they have coins instead of banknotes. Well worth the 2p in the pound that it costs us although usually the Sumup transaction takes longer than cash due to the time needed to enter the amount and then wait for the terminal to wake up and connect. The Sumup app will reject payments of less than £1.
Daily card payments vary from 40% to 75% of takings.
This year I have been concerned by an increase in the number of people who assume they are doing us a favour by paying cash and saying it will keep the money out of sight of the taxman. I wonder if this is indicative of an increase in this kind of practice in general.
I spent much of my working life earning less than or slightly more than the personal allowance so I count myself lucky to be earning enough to pay £3000 or so tax these days. I have no doubt this is an unusual point of view though.

 

[Busaholic]

My wife and I run a burger van and use Sumup to accept card payments. We prefer card payment as the money goes directly into the bank without needing to be counted and it reduces the number of times when we run out of change due to customers reluctance to check if they have coins instead of banknotes. Well worth the 2p in the pound that it costs us although usually the Sumup transaction takes longer than cash due to the time needed to enter the amount and then wait for the terminal to wake up and connect. The Sumup app will reject payments of less than £1.
Daily card payments vary from 40% to 75% of takings.
This year I have been concerned by an increase in the number of people who assume they are doing us a favour by paying cash and saying it will keep the money out of sight of the taxman. I wonder if this is indicative of an increase in this kind of practice in general.
I spent much of my working life earning less than or slightly more than the personal allowance so I count myself lucky to be earning enough to pay £3000 or so tax these days. I have no doubt this is an unusual point of view though.

I had over thirty years of running a shop. When I bought the business it didn't take card payments, but this was 1988. Almost the first change I made was to introduce the manual card machine for credit card payments, debit cards being something that largely came along later. With Access (the predecessor to Mastercard) there was a long delay while they made all sorts of checks into our honesty, but all eventually progressed. Barclays soon introduced the Barclaycard debit card, the first in the UK, and we accepted that too, but cheques backed by cheque card and cash formed the bulk of our takings. The credit/debit card takings, on paper forms, had to be paid in to the bank within three banking days. As time went on, we got more and more people asking, or demanding, a discount for cash but they were always rebuffed, as everything went through the till and was in any case logged into our paper sales book. One time we got a VAT raid, at the end of which after three days we received a letter stating we were owed a small sum, which never came! Our accountant told us to frame it, as it was as near an apology he'd ever seen. Anyway, the inference that anyone taking cash is automatically 'on the fiddle' is as offensive as saying 'all scout masters and male primary school teachers are paedophiles' just because some definitely are!

 

[12LDA28C]

So you keep a backup everything else in case a modern system goes down? Do you still keep your old washing machine just in case your current one breaks?
Its not "so called" as you put it - Its a real thing.
Not one person would ever claim it to be infallible. Everything breaks down - technology driven or not.
there are companies out there guaranteeing an downtime of less than 1 second a year. But the money it costs is staggering and its usually not worth it. You cant pay by card for a few hours in a single store. No one is going to die.

So you would have been happy to sit in your car on a petrol station forecourt for several hours or as long as it took for the system to return to working order? Nobody suggested anyone was going to die but it's hardly convenient is it? Your analogy of keeping an old washing machine is utterly ridiculous and fails to illustrate your weak argument. It's no bother to carry a few quid in cash in a wallet, is it?

 

[HSTEd]

So you would have been happy to sit in your car on a petrol station forecourt for several hours or as long as it took for the system to return to working order? Nobody suggested anyone was going to die but it's hardly convenient is it? Your analogy of keeping an old washing machine is utterly ridiculous and fails to illustrate your weak argument. It's no bother to carry a few quid in cash in a wallet, is it?

It is a bother to maintain an enormous cash production, distribution, collection and handling system however. A system that will consume resources even if it is very rarely used.

That has real costs that will be born by society.

At some point it will not be worth paying to maintain this infrastructure, and indeed many businesses have already concluded that we have reached this point.
It will be necessary, if a cash system is to be retained at all, to determine what the cheapest possible cash system is that can provide some sort of emergency functionality.

 

[12LDA28C]

It is a bother to maintain an enormous cash production, distribution, collection and handling system however. A system that will consume resources even if it is very rarely used.

That has real costs that will be born by society.

At some point it will not be worth paying to maintain this infrastructure, and indeed many businesses have already concluded that we have reached this point.
It will be necessary, if a cash system is to be retained at all, to determine what the cheapest possible cash system is that can provide some sort of emergency functionality.

Then I hope those businesses have invested sufficiently to ensure that there is absolutely zero chance of the cashless payment system failing because all the time there is any chance of failure, a backup system is needed.

 

[Hadlow Road]

Then I hope those businesses have invested sufficiently to ensure that there is absolutely zero chance of the cashless payment system failing because all the time there is any chance of failure, a backup system is needed.

Presumably the back-up includes opening all the TfL gates when one of the card company systems stops, as happened a whole back?

 

[HSTEd]

Then I hope those businesses have invested sufficiently to ensure that there is absolutely zero chance of the cashless payment system failing because all the time there is any chance of failure, a backup system is needed.

Well that's not strictly true, a backup is not always needed - you can simply not sell things until the cashless payment system is restored.

The visa payment system claims four-nines (99.99%) uptime.
That means it will be unavailable, on average, ~52 minutes per year.

Given that most businesses are not open 24/7, the actual average lost trading time will be much less than that.
This level of reliability is probably not worth trying to improve on for almost all businesses.

EDIT:
IN 2022 Visa actually managed five-nines reliability, which is ~5.2 minutes of downtime per year.

 

[12LDA28C]

Well that's not strictly true, a backup is not always needed - you can simply not sell things until the cashless payment system is restored.

The visa payment system claims four-nines (99.99%) uptime.
That means it will be unavailable, on average, ~52 minutes per year.

Given that most businesses are not open 24/7, the actual lost trading time will be much less than that.
This level of reliability is probably not worth trying to improve on for almost all businesses.

That sounds rather less than ideal. Especially if you are the only petrol station for 50 miles - not much use to the motorist.

 

[Falcon1200]

Which year will the UK go cashless?

Hopefully never, as people should always be able to choose how they pay, and if cash is more awkward for businesses, tough. I prefer to pay cash for smaller amounts, and also do not wish my every single purchase to be known to organisations when I have no way of knowing or controlling how they use the data they have collected from me - There is enough of that already!

 

[renegademaster]

That has real costs that will be born by society.

How much are actually these costs? Putting aside £20 a year of my tax to prop up cash is hardly something I'm going to cry about and I say this as someone who uses my card 99% of the time. I trust you belive train operators should never roster spare drivers and the national grid should only ever have one route between any two points?

== Doublepost prevention - post automatically merged: 13 Jul 2024 ==

The visa payment system claims four-nines (99.99%) uptime.
That means it will be unavailable, on average, ~52 minutes per year.

Visa central processing system, that no retailer interacts with directly is not the main problem when card machines go down. It's normally some problem with the WiFi network,broadband provider or the payment processor

 

[HSTEd]

How much are actually these costs? Putting aside £20 a year of my tax to prop up cash is hardly something I'm going to cry about and I say this as someone who uses my card 99% of the time.

Even today, with cash in regular use, many estimates for retail cash handling costs are ~5-15% of the value of the cash.
Much of this cost will remain even if the amount of cash actually being handled is very small.

You will still need to set aside staff, secure storage areas, we will need to maintain training for cash handling.
Machinery for counting money will have to be kept and maintained. The list goes on and on and on.

Apparently the current UK cash handling apparatus cost ~£5bn to maintain in 2020.

I trust you belive train operators should never roster spare drivers and the national grid should only ever have one route between any two points?

No?
The National Grid does not strive for absolute reliability and neither does the railway. They are impossible to achieve.
Why should we strive for absolute reliability here?

Visa central processing system, that no retailer interacts with directly is not the main problem when card machines go down. It's normally some problem with the WiFi network,broadband provider or the payment processor

Redundancy in WiFi network and broadband provider is an order of magnitude cheaper to provide.
It is only big systems like Visa or the Processors that cannot easily be backed up, and both service areas achieve very very high availability ratings as a result.

Given that the majority of establishments can't even tell you the price of an item without computer assistance, I am not sure how much practical backup value cash has.

 

[Cowley]

That’s probably a good time to close this as I think we’re starting to go over some of the same ground.

Thanks everyone