Why cash is making a comeback

Despite increasing reassurances by the banks (!) as to their safety and reliability, the rise of contactless payments and chip-and-pin has gone into reverse. New figures reveal that more of us prefer to use hard currency – whether because our accounts are empty or because we prefer the security of coins and notes.

According to a new report from the Payments Council and Link, which runs the UK's cash machines, the volume of cash payments rose by 200m in 2012, reversing the year-on-year decline over the past decade, with more than half of all our payments in cash, reflecting its easy use and its wide acceptance.

Whilst many prefer the anonymity of cash payment, remembering also to take the batteries out of their phones, or leave them at home, don't drive a car, or avoid walking past their daily allocation of 300 security cameras, and obviously ignoring the potential advantages of a 24/7 alibi, a key advantage of paying in cash means that we are continually confronted with the state of our personal finances. This helps to sharpen our savvy-consumer skills when paying with our ‘real money’…

NAM application
In the same way, NAMs who quantify and convert all concessions into cost and value, capturing the resulting impact on their company P&L, can  more easily demonstrate the value to the retailer in terms of both bottom-line result and incremental sales. This has to represent a major advantage over those who continually add cash & ‘non-cash’ concessions to their offering with little attempt to match and trade their way to a fair-share result.

Like the cash-paying savvy consumer, negotiating with real money automatically builds in the need for KPI achievement and compliance in order to provide all stakeholders with demonstrable value-for-money, besides being a constant reminder of our ability to make a profit or loss, via the use or abuse of 'our money'…  

BOPUT deals - at a checkout near you!

Contactless cards can hit shoppers with an inadvertent Buy-Once-Pay-UP-Twice deal as an extra payment can be triggered without their permission while paying with a standard bank card or cash.

The system, which can be used for goods worth up to £20, is supposed to work only when the cards are placed within two inches of special terminals at the checkout. But customers who got in touch with the Money Box show on BBC Radio 4 allegedly said they were charged when the plastic was in their purse and well away from the readers – meaning they unwittingly paid twice.

An article in the Daily Mail details shopper experiences in discovering the errors and obtaining refunds, and quotes the UK Cards Association’s suggestions that cardholders should not to put their wallet down in this quite narrow field when they pay.

Reality check!
Given that many shoppers may choose to hold their purse in one hand while multi-tasking                                (packing/coupons/babies/cash-back/loyalty points…) at the checkout, and even use their purse-hand to shield PIN input, it seems unreasonable to expect them to also remember to hold the purse at arm’s length, 'out-of-sight', away from the terminal…?

Action
Taking into account the fragile level of acceptance and relative novelty of contactless payment, retailers need to find ways of identifying the scale of the problem –‘naïve’ shoppers will expect that computer screens will simply reveal duplicate payments at a checkout terminal and in retailer records – and make immediate refunds, rather than await the inevitable build-up of creeping suspicion, and suffer the loss of business to ‘old fashioned’ competitors that still rely on personal contact….