Future Forum | Bank of England

A Cashless Society in 2018: a year of tension

by
Sabrina Rochemont
Sabrina Rochemont | 3 weeks ago | in Bank to the future

As the forum is about to close, we also need to conclude on the topic of a Cashless Society in 2018. The 2018 copy of the “Cashless World in Motion” is now released.

 

The paper first identifies the driving trends for the year, pointing to structural disruption of the payments ecosystem from conflicting forces. It then reports on regional developments for the topic, with emphasis on India, Kenya, the UK and Australia.

The technology landscape was conducive to adoption of mobile payments, with notable progress for the use of QR code payments in Asia as part of national payment initiatives to improve the cost efficiency of payment solutions, and increase financial inclusion. However, multiple and high impact outages in payment systems related to the underlying systems or telecoms infrastructure raised concerns about our reliance on technology for critical economic functions.

Convenience continued to drive consumer adoption of contactless card and mobile payments for low value purchases, with regional preferences as seen in 2017. Data scandals, cyber crime and fears of totalitarian state highlighted security and privacy concerns.

Innovation continued to offer consumers increasing levels of integrated retail experience and expanded their choice of financial services suppliers to new and more competitive digital entrants. As the use of cash reduces, the cost of transactions continued to feed the commercial payment ecosystem, costing consumers and businesses. This is also an on-going challenge to the viability of the existing ATM infrastructure, and a threat to the free access to cash.  

Key takeaways

  • Innovation remained buoyant in Asia and Africa.
  • QR code payments grew popular throughout Asia.
  • Developed countries were still reluctant to adopt mobile payments.
  • The reliability of the payment systems infrastructure was under scrutiny.
  • The cost of non-cash transactions was a global concern, whereas the cost of cash was seldom discussed.
  • The viability of ATMs continued to drop as the use of cash reduces, with on-going concern for the needs of some demographic groups.

 

Refer to the attached Cashless Society in 2018 paper.

Link to the Cashless Society Working party page.

Shelley (BoE Moderator) 3 weeks ago

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