Is Britain Heading Towards A Cashless Society?

It's possible – Britain is one of only a handful of countries considered by Mastercard research to be at the "advanced" stage of readiness to go cashless, along with Singapore, the Netherlands, Sweden, France and others. This means their culture, financial services, retail facilities and infrastructure all stand ready for a country where all payments are made digitally: no cash required.

This change has been going on in the UK for a while, especially among younger people. It may not feel like it, but every time you tap your card on the reader in a shop, use your mobile wallet to send a payment for a gig, or even just order something from Amazon, you're taking part in a new kind of economy – one that's underpinned by numbers on a computer rather than notes in a bank vault.

Data from Payments UK, the trade body for payment handlers, show that cash went from making up 71% of all payments in Britain in 2004 to just 53% a decade later. By 2024, cash is expected to make up merely a third or so of all transactions.

Meanwhile, a recent Mastercard survey found that the average Brit carries less than £5 in their pocket at any time. And in 2015, non-cash payments overtook cash – with more people using debit cards, contactless and mobile wallet payments than notes and coins for the first time.

If payment trends continue at their current rate, the UK could be a cashless society as soon as 2043. But what impact would this have on our daily lives, and who would be the winners and losers? Are people ready for an all-digital economy – or are there some benefits to keeping paper money around for a little while longer?

Cash has been greasing the wheels of commerce for hundreds of years, but it's more than just a relic of the pre-digital age. Anonymous, accepted everywhere and, crucially, allowing money to flow around and outside the banking system, it still plays a vital role that has yet to be replaced by a digital equivalent.

As research groups like the Cambridge Security Initiative have pointed out, cash becomes more in-demand during recessions, as consumers try to protect their savings and control their budgets. While interest rates and the value of currency can go up and down, cash can be an important shield for individuals against economic wobbles.

It's not likely that cash will just go away naturally as people gradually switch to electronic forms of payment – there'll always be holdouts who prefer to keep cash on hand. To go truly cashless needs concerted action and policy from governments and central banks, and that takes time.

For instance, the Swedish government has been actively phasing out cash since 2014, and even so, it's expected to take until at least 2030 before it's completely cashless. It's also vital to ensure certain groups – particularly the elderly, and people without access to financial services – won't be left behind by the transition.

We've taken a long look at the facts, figures and alternatives to cash that have sprung up in the past years and decades, including BitCoin and the Bank of England's planned cryptocurrency, RSCoin. We've charted the rise of cryptocurrency and other alternative payment methods like contactless cards, and explored the implications of going cashless for businesses and consumers alike.

There are plenty of good reasons to phase out cash – efficiency, convenience and tackling crime are just a few – but by the same token, there are many reasons cash is still very useful and relevant, and many questions that need to be addressed before we can ditch physical money completely.

Are you a big cash believer who likes to carry a wad in your pocket, or are you banking on a cashless society?