The growth of the cashless economy and COVID-19
April 14, 2020
The cashless economy has been growing steadily over the last decade and looked set to continue that way. However, the COVID-19 outbreak has driven a massive rise in contactless payments for everything from supermarkets to public transport.
Cash payments only accounted for 28% of transactions last year and improvements in payment technology actively encouraged consumers to pay by card. More businesses than ever were going cashless – with the cost savings made quickly offsetting the upfront costs of hardware and associated fees.
As fears around the Coronavirus outbreak increased, consumers became increasingly reluctant to pay in cash due to concerns over spreading the disease. Banks helped meet this demand by increasing the contactless payment limit to £45 in the UK making it one of the highest in Europe.
Contactless payments and the transport industry
Before the national lockdown, public transport passengers were already beginning to move away from paying for their tickets using cash, and operators were looking to facilitate this by moving to mobile ticketing and NFC.
Post lockdown, the transport industry is now vital to keeping the country moving and making sure that Britain’s key workers can get to where they need to be. The move to cashless now has an extra twist: the obligation of transport operators to protect their staff, while balancing this against the needs of those passengers who may have no alternative but to make cash payments.
There doesn’t appear to be an official stance. Some bus operators have announced that they will no longer accept cash payments at all, and in fact, the union representing bus workers (Unite) have stated that cash payments should be banned as they are putting both drivers and the public at risk. On the flip side, some operators have warned their drivers that they could face disciplinary action if they refuse cash payments. Despite encouraging people to use contactless payments as much as possible, some passengers don’t have the means to use mobile ticketing or NFC, and these people still need to be catered for.
Looking beyond COVID-19
When the country comes out the other side, it’s possible that the measures put in place regarding public transport and cashless transactions will be here to stay. For the operators, it presents an opportunity to use these new payment methods to generate the rich passenger data they need to optimise routes and create better services for their passengers. Many are taking this opportunity to reset and see where such improvements can be made in order to future-proof their operations.
Our smart-ticketing mobility platform, Ticketless™ combines mobile ticketing with an operator portal to view passenger and route data. If you’d like to know more about UrbanThings and how we could help you set up a cashless ticketing system, feel free to contact the team.