Published by Jessica Weisman-Pitts
Posted on August 29, 2022
4 min readLast updated: February 4, 2026
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By Mike Peplow, CEO at Paynetics.
Mobile banking has become the norm for many people across the country. People are very comfortable using digital wallets and it is no longer an emerging tech.
In 2020, 13.7 million people in the UK either didn’t use cash at all or only used it to make a single purchase. Meanwhile, 90% of UK card payments were contactless. Contactless payments increased by 12% on the year prior, despite the total number of payments made falling by 11% from 2019 to 2020. The pandemic has shown us that it is perfectly possible to go about your daily life without cash.
The rise of mobile banking and digital banking products has allowed more of the unbanked to become banked however, there is still work to do.
Payment infrastructure challenges across the globe
Electronic payments require a sophisticated infrastructure which, in some developing countries, is not yet available or is very expensive to access. Due to this, for traditional financial institutions, going cashless in developing countries isn’t an option.
However, the agility and flexibility of fintechs allows them to take advantage of infrastructures that are already in place in these areas and provide accessible services at affordable prices.
Giving these consumers access to e-commerce is low-cost for fintechs and allows the developing world access to global markets. We see examples of this with mobile phone use in Africa and QR codes being used in Asia to make purchases. Consumers here are already using this tech in their everyday lives and fintechs are able to easily ‘slot in’ to this and offer their products and services.
The benefits of a cashless system
One of the main benefits of going cashless is security and traceability. It eliminates the need to carry large amounts of cash and offers an easy way for most people to remain in control of their finances. However there is more that could be done here.
Secondly, cash can be cheaper as moving and banking cash is costly, particularly, for small retailers. There is an additional cost associated with moving cash around in a secure manner and stocking cash devices such as ATMs is expensive. It’s also better for the environment as moving physical cash around creates a significant carbon footprint that is not created by electronic payments.
Ultimately everyone benefits from a cashless system. It’s less expensive and more secure for retailers and consumers.
Access to cashless
Accessibility isn’t an issue isolated to developing countries. Many consumers, particularly the vulnerable, find budgeting with cash a lot easier than using electronic payments.
Consumers still tend to turn back to cash when times get tough, we’ve seen recent examples of this during the cost of living crisis going on in the UK right now, with personal cash withdrawals up by 20% from last year. This highlights that more could be done to help with the budgeting side of cashless payments, as it seems that no matter how sophisticated the tech, consumers resort to cash when money is tight.
Cash is also necessary for those without a fixed address or identification documents, cash can be used without having to Know Your Customer (KYC). Cash also offers the benefits associated with anonymity. People can pay someone without having to know them personally, or know their bank details and people may see this as less of a risk as no details are exchanged.
Accessibility and day-to-day end-user support for banking products are key. But, if we want an inclusive society we should encourage and educate rather than compel people to use electronic transactions.
So, will we ever be a cashless society?
We still have a long way to go to ensure everyone is catered for in the digital world.
High-quality, low-cost financial products for banking, loans and savings need to be within reach of everyone. Exclusion must be addressed with local support and education. In order to ensure financial inclusion credit unions, charities, and local groups must work alongside fintechs and banks. We’ve all got an important role to play.
Currently, the high street banks provide crucial access to cash and so while their presence nowadays is required less frequently due to innovations in digital payments, we must be careful not to leave the unbanked or less tech-savvy behind.
Digital banking refers to the use of digital platforms and technologies to conduct banking activities, such as managing accounts, making transactions, and accessing financial services online.
Financial inclusion is the process of ensuring that individuals and businesses have access to useful and affordable financial products and services that meet their needs.
Contactless payments are transactions made using a payment card or mobile device that allows users to pay by simply tapping their card or device near a point-of-sale terminal.
Cash management involves the collection, handling, and usage of cash in a business. It includes managing cash flow, ensuring liquidity, and optimizing the use of cash resources.
A cashless society is an economic state where financial transactions are conducted through digital means rather than physical cash, relying on electronic payment methods.
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