2p or not 2p: The Inevitable Shift to a Cashless Society… what we’ve been reading this week at Brand Genetics

After a review, the UK Chancellor, Philip Hammond, recently decided not to scrap the 1p and 2p coins for circulation in the UK — despite having described them as “obsolete” a year earlier.

One of the reasons given was that there were still 2.2 million people in the UK that are reliant on cash, amongst them businesses, charities and elderly members of the population. There was talk about “sleep-walking into a cashless society” without thinking through the consequences. There were also fears of price rises (rounding up), and damage being done to the economy — despite the fact that Canada, Australia, Brazil and Sweden are amongst the swathe of countries to have already made the change successfully.

So, is there more going on here? Is it possible to have an emotional connection to a particular coin? If a quick trawl of the internet is anything to go by, then the answer is “yes”. People use the 1p coins for a whole variety of different uses from keeping tulips fresh (you drop one into the vase) to helping in baking (and avoiding a soggy bottom!)

However, this appears to be just a stay of execution and the days of the copper coins are still numbered. The proportion of transactions using cash has fallen sharply in the past decade, from 61% in 2007 to 33% in 2017, according to UK Finance data. There were almost 5.6 billion contactless payments in 2017 and this number has undoubtedly risen since then.

So, this begs the question, what are the tools and innovations that can help with the inevitable transition to a cashless society? Given that mobility will be critical in any future cashless society, here some are app-based solutions that might help.

Cahsless Banking

Monzo is probably the most well-known of the pioneering wave of digital, mobile-only banks and claim that 28,000 people open an account with them every week. Monzo offers instant notifications on your phone so you can keep track of your money in the moment. You can also set spending limits and will not be charged a fee for using the card abroad.

Giving & Donating

Charities are particularly dependent on small change deposits — think collection tins — but removing small denominations need not mean the end of easy donating. There are multiple apps that can fill the void. One Today is a Google sponsored initiative that allows people to donate — you guessed it — $1 to a selection of pre-vetted charities. A similar approach is taken by Donate a Photo — this Johnson & Johnson sponsored app will give $1 to a good cause in exchange for a photo from your smart phone. In London, it is possible to donate £3 to homelessness charities by using contactless payment means at 90 special points around the city.

Saving and Financial Skills

Being given pocket money is still one of the best ways to teach kids how to manage their money, but this would all change in a cashless society. But there are a few great apps out there that can step in. One of the best is Pigby’s Fair — a NatWest developed app that combine simple elements of gaming, whilst also teaching young kids critical financial skills. For slightly older children, Go Henry might be an option. This is a pre-paid card, linked to an app, so that spending can be easily tracked and managed. However, it also comes with a number of parental controls, so that Mum and Dad can also keep track and step in when ‘little Johnny’ tries to buy that iPad he’s had his eye on. And, since it’s not just kids who have trouble saving and managing their money, apps like Squirrle.me can help get the household finances under control.

The HX Learning?

Regardless of the emotional attachment that some people seem to have for 1p and 2p coins, the reality is that they will eventually disappear from our pockets (and the backs of our sofas). It’s also likely that the other coins will follow shortly afterwards. The cashless society is coming, but it’s important that there are tools in place to help everyone — old, young, rich and poor — make the transition as painless as possible. The apps that are currently available are likely to be just the first crop of tools designed to make our financial lives digital and frictionless. But that is not enough. Education on the consequences of the shift will be critical, as will the ability of government and financial services to build trust and security. It may not be an easy transition, but what is critical is that no one should be left behind by the move or feel somehow excluded from the way that society has evolved.

Marc Edwards is a director at Brand Genetics, an insight and innovation agency specialising in human-centred insight and innovation. With nearly 20 years of agency and client-side experience, Marc is an insight and innovation specialist, with and a track record of driving value in brand and products through strategic planning and creative ideation.

Human-Centered Insight, Innovation and Trends from Brand Genetics www.brandgenetics.com

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