UK banking is heading that way, too
I run a small business that's about 90% home-owner focused. Depending on the work involved, transactions can well be sub-£100 (110 USD). Before Covid, around 80% of these smaller transactions were cash and that meant carrying significant sums around until someone could get to a branch to pay it all in. This also meant paying a 'cash handling fee' at the branch (imagine: having the outright temerity of wanting to put money into the account!) AND a 'counter fee' for visiting the branch. I forget the exact figures but the cash fee was 1-2% of the value being transacted.
Now, getting cash into a bank in the UK isn't easy these days: finding a branch is hard enough - they're in town centres mostly - but therein lies the problem for a commercial vehicle operator: all the towns with banks near here have multi-story car parks and we can't fit our vehicles in them, which means a long walk from the town-edge car parks or a quiet side street (obviously, when someone's carrying several thousand Pounds in used notes, you want to minimise your exposure to risk). Fortunately, the Post Office have a scheme whereby cash can be paid in over the counter and they transfer it to the bank. Given that scheme, it makes no sense to continue banking with a high street 'name' and I moved the business to an online-only bank in April last year.
During Covid, our services were still required (we are in a healthcare-related field) and the vast majority of these smaller sales moved to using a card reader, both for the non-contact nature of the transaction and because people weren't going outside and, therefore, didn't have cash in the home. Interestingly, post Covid, we haven't seen cash sales go back up: around 90% of all transactions are now done via contactless card readers. I suspect this is mostly due to a change in habits after, what, eighteen months of lockdowns and inconvenience - but we were seeing a gradual rise of card sales in the three years before the virus anyway; I think the virus simply accelerated the uptake.
In short, we wouldn't see a significant change in habit if the UK banks followed the Aus. system and stopped handling cash (providing the P.O. carry on their counter-service - and that's another issue that's slowly becoming a problem). I imagine a very large number of tradespeople could well operate without cash, too - but I imagine it'd make it harder for some who operate in...interesting...ways: We are sometimes asked 'How much for cash?' and traders who entertain that concept might struggle to hide these novel payments if everything is logged electronically.
Shops already take cards - so no change for them (see what I did there?) but the big losers in a cashless model are the occasional traders: car boot-ers, the parent selling off reusable children's toys, etc. because buying a card reader and subscribing to a service model will be too much work for such infrequent use. Until that sector is adequately addressed, cash will still be required by some people - and so cash handling services shouldn't be suspended. Unfortunately, they make up such a small percentage of banking turnover, I fear they will be discarded as not relevant to the business model.
Biting the hand that feeds IT
