Ready to ditch hard cash? Digital banking firm Revolut claimed on Thursday that a combination of blockchain technology, contactless payments and smartphone features will push countries to switch en masse over the coming years — with the possibility for the United Kingdom to go fully cashless in just 10 years.
“In the U.S. and the developed world, there aren’t any significant barriers for anyone except those who want to make use of cash features such as the inability to trace it,” Vlad Yatsenko, CTO and co-founder of Revolut, tells Inverse. “In the rapidly-evolving payments ecosystem, corporate treasurers must adapt to meet the rising demand for cashless consumer payments.”
The shift would mean people ditching coins and bills in favor of electronic solutions like cryptocurrency and cards, a movement that’s well underway. The company claims non-cash transactions grew 10.5 percent last year to reach 522.4 billion global transactions, a figure set to rise to 725 million by 2020.
One major hurdle for American adoption, Yatsenko says, is the “significant” cost of card processing payments. Fees in the United States run around 1.5 percent higher than in Europe, where fees run around 0.2 percent to 0.4 percent plus the issuer’s foreign exchange fees.
“At Revolut we are taking it even further by removing the FX fee and offering the real interbank rate to offer our customers the best possible rates,” Yatsenko says. Revolut arrived in the United States in early access in September.
Sweden is another hub for the cashless movement. Around 36 percent claim they never use cash and 25 percent use cash once a week, a figure that was 63 percent as recently as 2013. Ideas like banning cash on buses and market traders accepting card payments have meant less than 20 percent of in-store transactions use cash, and the total amount in circulation has dropped to its lowest level since 1990.
China is another success story of cashlessness, with WeChat owner Tencent finding 92 percent of mobile internet users prefer QR Code-based app payments for offline transactions. Mobile app payments moved $5.5 trillion in 2016, while the United States used mobile payments for just $112 billion of transactions in the same year.
Not everyone is on board with the cash-free movement. The Guardian reported in February on how Britain’s homelessness charities have struggled with the transition, as sellers of the Big Issue homeless magazine adopt contactless readers to continue taking payments. Barclaycard claims charities that continue to depend on cash could lose up to £80 million ($114 million) in potential donations.
As the cryptocurrency market shows potential for recovery, providing a means of going cash-free outside of banking institutions, cashlessness could show a surge of interest over the coming year.