Cash will not die, but more retailers will become cashless

Cash will remain in circulation well beyond 10 years, experts say.
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Cash will remain in circulation well beyond 10 years, experts say.

Retailers do not believe cash will vanish within 10 years, but they do expect to see a rising number of shops ripping out their cash drawers.

A survey paid for by Mastercard found half of New Zealanders believed cash would have vanished within a decade.

But retail experts doubt the 49 per cent are right, though they expect upmarket, high price retailers to stop accepting cash.

Chris Wilkinson from First Retail Group predicted a continued decline in the importance of cash in retailing.

"[But] The use of cash is incredibly variable around the country. In many of the provincial areas cash is still a big part of the local economy," Wilkinson said.

Greg Harford from Retail New Zealand said cash use was also high in some urban settings such as South Auckland. He said some shops and men's barbers in Dunedin, for example, only accepted cash, not cards.

Retailers see many drawbacks to cash.

It is expensive to handle, and makes shops a target for robbery.

Cash also sits uncomfortably in the trend towards customer self-service, as machines that accept cash have more moving parts and are more costly to maintain than machines that only accept cards and other forms of electronic payments.

Some businesses, such as resorts in the Pacific Islands, had stopped accepting cash in part to stamp out theft by employees, Wilkinson said.

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He expected to see some retailers stop accepting cash, especially those focused on selling higher-priced articles to high-end customers such as fashion boutiques.

"Within the next two years we are going to start seeing retailers pulling out their cash drawers."

Some retailers already have a limited number of tills that accept cash, such as upmarket supermarket Farro Fresh, with most accepting only electronic payments methods.

Hartford said: "Cash is certainly here to stay. It isn't going to disappear in a hurry."

But, he added: "It is becoming less significant as a means of payment."

Harford said: "We are predicting that over the next 10 years contactless payments will increase from 1 per cent (of retail payments) to 35 per cent."

As the Visa and Mastercard scheme debit cards gained market share, they would displace both cash and eftpos payments, he said.

Many people are already virtually cashless with 36 per cent of those surveyed by Mastercard saying they could live without cash.

Mastercard's Peter Chisnall said: "New Zealanders are early adopters of technology and are increasingly seeking fast, convenient and secure ways to pay".

"Retailers who are offering new technologies such as contactless payments are finding it a fast, reliable and easy way for customers to pay."

The payments methods those surveyed thought would increasingly replace current payment methods were mobile payments (44 per cent), biometrics/facial recognition/fingerprints (21 per cent) and wearable technology like smartwatches (18 per cent).

The amount of cash in the hands of the public continues to grow, however.

In December, cash in the hands of the public spiked over $5 billion for the first time, a function of natural growth in the economy and Christmas. That was 8.8 per cent higher than in December 2014.

 

 - Stuff

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