State of pay and cashless society

James Silver looks into the future and sees a cashless society, which technology has already largely enabled, but may yet be delayed by consumer caution


It’s a drizzly Sunday morning in 2020 and Harry is shuffling to Sainsbury’s to pick up some milk, Alka-Seltzer and cat food. At the automated checkout, a camera scans his iris and the till spits out a receipt.

That afternoon, at the cinema, he pays for tickets with little more than a wave of his RFID-enabled (radio frequency identification) wristwatch past an electronic reader, connecting to his bank account. Later, dinner is Domino’s pizza delivered to his door, paid for by the virtual credits he’d steadily been accumulating on his Zynga gaming account; (he’d also qualified for a new range of gardening equipment).

Harry can’t remember the last time he put his hand in his pocket for actual, you know, cash. Paying for things with coins and banknotes seems, well, like something the Victorians did. Like walking canes and whooping cough.

Society is on the brink of generational disruption in the way we pay for goods and services

OK. Harry’s cashless society may not quite be here in eight years. Yet all the modes of payments listed in Harry’s Sunday are already viable or in use in other fields. Iris recognition technology, though flawed, can be found at a number of airports and border agencies around the world, while a wristwatch containing an e-wallet was developed by Speedpass and Timex nearly a decade ago, and a handful of businesses, including Wuala cloud storage, based in Switzerland, already accept virtual currencies.

Society is on the brink of generational disruption in the way we pay for goods and services. Indeed, it could be argued that we are living through a period of what might be termed “technological congestion” with the arrival of new payment methods ranging from F-commerce to smartphone NFC (near field communications), and payment apps to services like Stripe, Braintree and Dwolla.

And as a global financial services – and payments – hub, the UK is well placed to take advantage of all this innovation, says MP Mark Hoban, Financial Secretary to the Treasury. “Almost 80 per cent of UK households have internet access, 38 million adults (74 per cent of the population) shopped online last year and half of mobile users now access the internet via a mobile phone,” he says. “Some 27 million adults (52 per cent) use internet banking. The UK is a world leader because we are such a highly-networked country, with multiple, interlinked technologies, including PCs, tablets, laptops and smartphones.”

Certainly, East London’s technology quarter, which grew organically, but was collectively branded Tech City UK by the Government, is spawning a number of notable “fin-tech” start-ups, among them GoCardless, an online payments platform.

When viewed as part of a payments landscape which incorporates Britain’s leading banks, payments providers, telecommunications companies and retailers, new tech companies have the potential to offer real advantages to the general economy, by making it quicker and easier for payments to be made.

“At a time when credit is constrained, faster payments makes money work harder,” says Mr Hoban. “Small businesses alone are having to fund almost £110 billion in overdrafts and short-term loans. They will benefit most from faster payments.”

He says the Government intends to develop the UK’s world-leading faster payments technology further, by ensuring “red tape does not stifle innovation” and putting in place “a supportive regulatory regime that promotes competition”. Welcome political pledges, with a familiar ring.

But, ultimately, of course, money is emotive and trust slowly earned. If Harry’s cashless utopia does not arrive by 2020, it will be down to consumer caution, rather than tardy technology. In other words, the public still needs to be persuaded that it needs a wristwatch to buy cinema tickets.