Home Economy Why launch a new fiver when Britain is fast-becoming a cashless society?
Cash is a security nightmare, says money transfer firm
Why are we launching a new fiver when Britain is fast-becoming a cashless society, asks business payments specialist Covercy.
It’s been nearly five years since the last note launched, but much has changed in British society, says CEO Doron Cohen.
Contactless payments have reached a record £1.5 billion this year – roughly three times the level of 2015.
Notes are untraceable, with over 240,000 counterfeit notes being discovered last year alone.
Cohen said: “Nearly five years on since the Bank Of England last introduced a new banknote, the benefit of circulating a new five pound note now is quite questionable, due to a payments revolution currently underway in the UK.
“Britain is well on its way to becoming a cashless society, as last year, for the first time, notes and coins were used in less than half of all payments.
“A key driver in this has been the adoption of contactless cards, with monthly spending by this method reaching a record £1.5 billion this year, roughly three times the level of 2015.
“Not only this, some long-standing British institutions are actually becoming cashless too, such as Transport for London (TFL) who banned cash on the buses in 2014 and has saved £24 million in cash-handling costs already.”
“From a security point of view, banknotes are a nightmare due to being untraceable, with at least half in circulation being used for a range of illegal activities.
“UK businesses bear the brunt of this problem, with over 240,000 counterfeit notes being discovered last year alone.
“The financial powers-that-be should focus future initiatives instead on helping contactless to grow further, especially amongst businesses in the UK.
“Moving to a cashless society has immense benefits for British firms as such payments are fully traceable, secure and also decrease the risk of money laundering.”
The new polymer five pound note was launched in England and Wales yesterday and is set to be rolled out in Scotland later in the year.
The three Scottish issuing banks are printing their next £5 and £10 notes on polymer as follows: Clydesdale Bank £5 on 27 September 2016, Bank of Scotland on 4 October 2016 and RBS on 27 October. Find out more here.