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Out of pocket: the dying days of cash

We're the fifth highest users of ATMs in the EU but with banks selling them off, the 'Pass Machine's' days look numbered, writes John Meagher

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Cashless: Husband and wife team Stephen and Ruth Deasy of Bear Market Coffee, which has stopped taking cash at its South Great Georges Street branch in Dublin

Cashless: Husband and wife team Stephen and Ruth Deasy of Bear Market Coffee, which has stopped taking cash at its South Great Georges Street branch in Dublin

Tap, tap culture: Sinead Ryan warns that going cashless can have repercussions on budgetary discipline

Tap, tap culture: Sinead Ryan warns that going cashless can have repercussions on budgetary discipline

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Cashless: Husband and wife team Stephen and Ruth Deasy of Bear Market Coffee, which has stopped taking cash at its South Great Georges Street branch in Dublin

Church-gate charity collections have been a feature of Sunday mornings in this country for as long as anyone can remember. Since time immemorial, people shuffling out of Mass have rooted around in their pockets for loose change for the good-cause buckets held by volunteers.

For St Vincent de Paul (SVP, this has been an important way in which donations are gathered. But the charity - one of Ireland's oldest - noticed a change in recent years: many of those who would have been expected to throw a couple of euro their way found their pockets were empty. They just had debit and credit cards with them. As more and more of us embrace a life free of cash, charities were starting to feel the brunt. Something had to be done.

Just before Christmas last, SVP's fundraising team launched a new 'tap to donate' initiative. Now, when it comes to collecting outside churches and various events around the country, people can simply tap their debit or credit cards to give to the charity, or - depending on their bank - use their phones or smart-watches to make a quick donation.

"We really sensed that we had to move in this direction," says SVP spokesperson Jim Walsh. "People are not carrying cash with them like they used to and they have got used to 'tapping' and going on their way."

St Vincent De Paul's fundraising team show how you can give cashless donations to SVP this Christmas.

He says there has been a good response to the initiative in the six weeks that it has been in operation. And it couldn't be simpler: the device is set to receive a €5 donation, but it can easily be adjusted for those who want to contribute more or less money.

If charities have had to move with the times, so too have churches. With weekly parish collections down - partly due to the sharply declining numbers attending churches over the past quarter-century - some have also had to introduce a tap-to-donate device.

Last year, the Archdiocese of Dublin introduced this service in a small number of its churches on a pilot basis. Rather than pass around a hand-held gadget - as they do with the traditional basket for cash - the machine is installed at the back of the church and members of the congregation are encouraged to donate after Mass has concluded. If the initiative proves to be a success, it will be rolled across the country.

Both St Vincent de Paul and the Catholic Church are just two organisations that have come to see that they cannot ignore a move to a more cashless society. There has been remarkable change in how we pay for goods and services over the past decade.

Figures from the UK are likely reflective of trends in Ireland: in 2008, cash accounted for 60pc of all payments; by 2018, only 28pc of transactions were carried out in cash.

And that transformation has been reflected in the news that the banks want to sell off around 1,000 ATMs. With fewer people using holes-in-the-wall, and with automatic teller machines costly to maintain, it makes sense for some of the bigger banking institutions to part ways with them - especially as some of the older machines are no longer able to accept software upgrades.

It was all so different 40 years ago this month when Ireland's first ATM was unveiled at the Stillorgan Shopping Centre in Dublin. It may have come 13 years after Barclays Bank introduced Britain's first hole-in-the-wall in London, but it still felt like a vision of the future. The most common amount dispensed by the first machines in 1980 was £5 - a far cry from many of today's machines that seem to be loaded only with €50 notes.


Network sell-off

Bank of Ireland were first off the mark and for many years, the generic name for an ATM in this country was 'Pass Machine', in deference to the name of that bank's cards and machines. But it wasn't long before rival banks caught up.

Today, there are 3,000 ATMs nationwide owned by a multiplicity of banks, with a further 750 units provided by independent operators. Already, Ulster Bank sold off a network of 400 of its ATMs to US giant, Euronet.

The amount withdrawn from the machines is down over the past decade, but Irish people are still taking around €4,000 a year per capita from ATMs - the fifth highest level in Europe. Many of them are thought to be older people, more conditioned to carrying money about with them, than their millennial and Generation X 'youngsters'.

But while the queues at the ATMs may still be there, there appears to be a cohort of people - many of them early adapters to technological developments - who appear to have eschewed cash entirely. And that's illustrated in a new global survey.

According to analysts at the research firm GlobalData, the 2020s will see seismic change with increasing uptake of cashless payments as some countries make greater strides than others.

The research said that e-commerce accounted for $3.5 trillion of worldwide sales in 2019 and forecasts which economies will be leaders in cashless payments by 2022.

Ireland ranked eighth overall in the research, but GlobalData said it comes top for the frequency of use of payment cards. Increasing card use and the advent of mobile payments and fintech apps have facilitated much of this rise.

Scandinavia has seen a particularly vibrant uptake of digital payments with a Deloitte report from last year predicting that at least one Nordic country will be "de facto" cashless in 2025 with limited use of paper money in the economy. A 2019 survey in Sweden illustrated how cashless the country has become: only 60pc of respondents could remember using cash the previous month. (By contrast, some 79pc of Japanese people use cash every day.)

For young entrepreneurs like Stephen Deasy, the idea of having cash in his wallet is an antiquated one. Deasy, together with wife Ruth, owns a series of cafés under the Bear Market Coffee Co name in Dublin and last May they opted to go completely cashless at their café in South Great George's Street, in the bustling south inner city.

"It makes a lot of sense for us to go cashless at a location like that," he says. "The vast majority of customers used tap-and-go rather than cash and it's just so much easier not to have to deal with cash."

He says the advantages far outweigh the negatives. There's less flustering when it comes to time at the till and there's no 'shrinkage'. Plus, it's far more hygienic for the staff," he says. "Cash can be quite dirty to handle."

Older demographic

A sign at the till advices customers that cash is not accepted. "We'd only have to turn away two or three people a week," he says. "You might get the odd person who's annoyed by it but, for lots of people, they've already moved on from cash and welcome it."

But Deasy says fully cashless shops only work in certain locations. He points out that in the original Bear Market café - in Blackrock, Co Dublin - cash can still be used, and that traditional option is popular with many customers. "There's an older demographic there," he says. "About 40pc of all transactions would be in cash. It doesn't make sense to introduce a cashless policy in a location like that."

A new Dublin coffee shop may be the first in Ireland where customers cannot pay with cash. Bear Market Coffee, in George Street, is completely cash-free, which owners Ruth and Stephen Deasy say means staff can concentrate on providing better customer service.

Deasy is one of a small number of business people with high street operations that have taken the cashless plunge. Many still seem reluctant to alienate those for whom cash remains king.

But further change is coming down the line. The Road Transport Authority is keen to replace Leap Cards [used on Dublin Bus, Luas and Dart services] with cashless payments by 2027. And Visa has repeatedly urged the introduction of a government-run merchants' incentive scheme to help small businesses offset the costs of buying electronic payment equipment and carrying out training.

And yet, despite the changes in how we pay for things, it seems as though a considerable number of us have reservations about a fully cashless Ireland.

In a survey conducted by the Dublin Mint Office last year, 67pc of people said they would not like to do away with notes and coins while 88pc believe a cashless society would leave certain pockets of the population behind including the elderly, the homeless and small businesses that still rely on cash transactions.

And many of those working in the frontline of the service industry lament the decline in tipping - especially when appreciative customers would be tempted to empty their change into the tip-jar.

There's particular concern about our senior citizens and with the charity, Age Action Ireland, pointing out that around 50pc of people between 65 and 74 have never been online while the proportion of those above the age of 80 who use the internet is negligible.

Furthermore, some fear that the removal of cash would see an increase in the amount of fees being levied to use cashless devices. Consumers' Association of Ireland policy adviser Dermott Jewell has said that full-on moves to a cashless society would negatively affect Irish consumers, denying them choice and promoting and maintaining an unacceptable regime of fees and charges.

Mindful spending

Financial wellness coach Sinead Ryan - who covers consumer affairs issues for the Irish Independent and Newstalk - says an increasingly cashless society is bad news for those who struggle to keep a lid on their spending.

"The difficulty with being cashless is it's much more difficult to budget," she says. "I'm very much against contactless payments because while you get convenience, you lose in the habit about being mindful about your spending. Even having to push in that card number, even for a few seconds, makes you think, 'Do I really need this? Do I need this now?'

"But with the tap, tap, tap culture, we lose all that. I know people who get to the end of the month and they think they've been robbed and all those contactless payments have jacked the spending right up."

Despite those misgivings, Ryan says cashless spending is more secure, not least because cash can be lost or stolen. "But you are losing that discipline about budgeting," she says. "There's a behavioural economics narrative around it because once something becomes a habit, it's much harder to break it and it becomes custom and practice."

For those who have difficulty with spending habits, she encourages them to either take cash out or to limit their cards to a set amount. "One thing that really bothers me is the idea of contactless payments on credit cards. At least with debit cards, you're spending your own money, but on a credit card you're effectively spending other people's money.

"It wasn't that long ago when if people wanted to access credit, they had to make an appointment with their bank, go into their branch, plead their case and wait to hear back. Now, every time you tap your credit card, that's a loan - it's borrowing."

For St Vincent de Paul, meanwhile, the contactless option is set to stay. "It's been very well received by the volunteers who have used them and the people who have donated have been very receptive to it, too," Jim Walsh says. "Having that choice is great - and it's important to give that choice in 2020.

"So far, it looks like it's part of the future but it will probably never take over completely from cash. I think there will always be a cohort of people who carry loose change with them - out of force of habit, as much as anything else."

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