BofE launches cash vs cashless challenge

BofE launches cash vs cashless challenge

As part of a new open forum on the future of money, the Bank of England is challenging Brits to see if they can live for a week either using only cash or not using cash at all.

The BofE says banknotes will remain an "essential form of payment for some time" - just this week, it has invited the public to nominate a scientist to adorn a new £50 note.

However, as card and mobile payments continue to grow in popularity, the bank also wants to engage Brits on what money will be like in the future, launching an online forum that will run until the middle of January.

Central to this is the 'cash vs cashless challenge'. Brits who usually pay with cash are being asked to spend a week only using cards and other electronic payments methods, while those that generally go cashless are invited to try digging out their notes and coins.

The BofE wants participants to keep a log of their experiences and then let it know how easy or difficult it was to carry out the experiment, what the challenges and benefits were and whether the week has changed or cemented their views on how they make payments.

The online forum will also host live Q&As with bank bigwigs, including governor Mark Carney, as well as online polls and blogs.

Meanwhile, a school competition is inviting kids to send in short films on their ideas on the future of money. Winning schools will win cash prizes with the students receiving gift vouchers.


Says Carney: "I’m looking forward to hearing your questions, ideas and thoughts. Together, let’s decide the future of money."

Editorial | what does this mean?
This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.

Comments: (4)

Alexander Peschkoff
Alexander Peschkoff - Trusted - London 05 November, 2018, 08:56Be the first to give this comment the thumbs up 0 likes

BofE needs to avoid the Brexit situation whereby people form wrong opinions on the basis of insufficient information.

Philip Andreae
Philip Andreae - PA&A - Atlanta 05 November, 2018, 16:27Be the first to give this comment the thumbs up 0 likes

I tried something similiar once.  Remember Proton, an Electronic Purse deployed in Belgium.  I loaded an equivalent sum of money on it and also took out cash.  I did not go get more cash, until I had spent both forms of money.  It was a painful experience. 

Acceptance is the key.  We are now at a time where Merchants are saying no to Cash while other merchants are still saying no to Cards.  We then have Cryptocurrencies and other disruptive forms emerging.  We are confusing Means of Payment with Methods of Payment. 

 

For me:

Means are Currency (cash) in Hand, Credit Lines and Funds on Account (deposits). 

Methods are Cards, Checks, Wires, ACH, Notes and Coins and all these new methods people are promoting.

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 November, 2018, 18:56Be the first to give this comment the thumbs up 0 likes

@Philip Andreae:

Very insightful comment, indeed!

In the India of today, your experiment will have a resounding success. For purchases, it's possible to survive only on cash and equally well only on cashless method of payments (MOPs). So far, no merchant refuses cash. Many mom-and-pop stores do hesitate to accept cashless MOPs but it's always possible pay with cashless MOPs to buy the same goods from organized retail chains in the metro areas and ecommerce websites in many more areas. When it comes to P2P / A2A, cash of course works but we also have three core rails that support near realtime cashless payments 24/7/365 (NEFT, IMPS, RTGS) and at least a dozen overlay products that run off of these three core rails (e.g. PayTM, PayZapp, BHIM UPI). Ditto bill payments.

I totally agree that there's a massive confusion between what you call Means and what I've been calling "funding sources" and MOPs. At the height of the mobile wallet hype 5-7 years ago, I remember shouting from the rooftop to whoever would listen to me that mobile wallets that save credit cards digitally could only hope to kill the plastic form factor / MOP but not the underlying credit card funding source. Of course, mobile wallets haven't even managed to kill plastic yet, but that's a story for another day. 

Ketharaman Swaminathan
Ketharaman Swaminathan - GTM360 Marketing Solutions - Pune 05 November, 2018, 19:03Be the first to give this comment the thumbs up 0 likes

Correction: PayTM is not only an overlay product as I mentioned above but also a core rail, just that it's closed loop. It has 250M consumers and supports a parallel acquirer network that covers 8 million Merchants, which is 3X of that covered by open loop card networks. Thanks to PayTM, a number of mom-and-pop stores have also started accepting cashless MOP.

Featured Job
All Jobs »
London

Project Manager

Competitive

15 Dec