Money, otherwise known as the medium of exchange that we rely on to pay for our daily sins, has been used by man in various forms since the beginning of known civilisation. The humble pennies and pounds that we keep in our wallets, the coins that we so take for granted, are the distant, great, great, great grandchildren of the first known coins which were created in Ancient Greece, India, and China, over 2,500 years ago. Even modern paper bank notes such as the fivers, tenners, and twenties that we use are the descendants of the first known paper banknotes which appeared during the Song Dynasty period in 11th century China. And then only last century we witnessed the birth of a new form of payment, in the form of the humble plastic debit and credit cards through which billions of pounds exchange hands each and every day. In short, the money that we use has a long, global heritage and is ever changing.
Only 53% of all payments are now paid for by cash
Over the 2,500 years of its existence, cash has undergone constant evolution and new forms of payment have appeared in a way that reflects the discoveries and advances that we have made as we have developed. Following the creation of coins, paper banknotes, and then plastic cards, the digital revolution is further changing the way that we pay for the everyday things that we need, and our shift towards “cashless” payments has taken a further leap forward. Admittedly cash is still the primary means of payment here in the UK, with 53% of all transactions still being paid for with actual notes and coins, but cashless payment is fast catching up and is undoubtedly the future.
Here are a number of ways in which we pay for our groceries, clothes, and even takeaways, without needing to use so much as a physical pound or penny.
Payment via debit card
Debit cards are quite literally the cornerstone of our modern consumer lives. The annual publication, UK Plastic Cards 2013, has shown that just under 47 million, or 91% of the UK population have a debit card. They are seemingly as important to us as the food that we eat and the air that we breathe, and the fact that 32% of all transactions were made via debit card means that they are the second form of payment. Over 7.7 billion purchases were made in the UK to a value of £337 billion via debit card in 2013 and of all UK retail sales that took place, 50% of them were paid for by debit card. Basically they are a big deal.
Payment by credit card
Credit cards are an incredibly popular method of payment, and borrowing from the bank in this way affords us the luxury of being able to spend safely and securely. Statistics show that 61% of the adult population in Britain holds a credit card, and that 2.2 billion purchases were made in the UK to the value of £140 billion through their use. They are a fantastic tool for any shopping hungry consumer, but potentially high interest payments on credit limits mean that a level of discipline is required when using them.
The contactless card is one of the more recent modern marvels. Instead of having to swipe or use a chip-and-pin to make payments, the consumer can simply tap the card on a reader and be on their way. However not all cards can do this and not all shops have the facility to accept them, seeing as they are still in their infancy. In addition to this, payments via contactless cards are currently limited to £20, which makes them useless if you need to make a larger purchase. At present there are over 32 million contactless cards in circulation in Britain.
The internet is not strictly speaking anything new, but the way that its use has gone mainstream and the way in which we use it today most certainly is. It has changed the world that we live in and consequently the way that we shop and make payments. Statistics show that consumers spent £68 billion online in 2013 through using their cards, which is a £5 billion increase on 2012, which accounts for a whopping 15% of all card spending! Also, consumers have access to registered payment services which link to your account, such as Paypal, which are safe, secure, and easy to use. Online shopping is huge and it is only going to get bigger.