Covid may have fast-forwarded the demise of notes and coins by at least five years, but not everyone is enamoured with a cashless future
Kate Verling had long dreamed of turning her nail bar business into a completely cashless one. When the pandemic struck, she got her chance.
Like all salons, her Dublin-based hand and foot spa, Mink, had to shut its doors during the most severe Covid restrictions, but when reopening was permitted in June 2020, she decided to walk away from cash for good.
“Before the pandemic, most transactions would have been cashless anyway,” she says, “but with so much emphasis on hygiene and social distancing, most people were moving away from cash in big numbers.”
The response from customers, she says, was overwhelmingly positive. Two years ago, on reopening, about 10pc of customers asked to pay with cash; today, it’s less than 1pc.
It’s a trend that is unlikely to be reversed. In a Bank of Ireland survey of SMEs in March, almost half (47pc) of business owners said they believed they would be completely cashless within 10 years.
But the backlash against AIB’s plans to scrap ATMs at 70 branches — which forced the bank into a U-turn — suggests some people won’t turn ditch notes and coins so easily.
“We’d never want to embarrass someone if they came in with €100 in cash and asked to buy a voucher,” says Verling. “We will accept it, but we gently say that we’re a cashless salon.”
For her core customer base — women in their 20s and 30s — the idea of paying with cash seems anachronistic. “It’s all Apple Pay on their phones,” she says. “Personally, I almost never carry cash any more and I think a lot of people are the same.”
As a business owner, she is adamant that being cashless has few, if any, downsides. From a security point of view, it’s a huge bonus. “As a business employing women, there’s that peace of mind knowing that there’s no cash on site [in the event of burglary]. It’s just a cleaner way to do business and it’s very efficient. Everything is above board.”
Verling has three south Dublin salons and is hoping to expand into the UK market soon. She will not hesitate to make the business cashless there. “I really don’t think there’s any going back.”
Stephen Deasy has little interest in returning to cash either. Together with his wife, Ruth, he operates seven Bear Market coffee shops in Dublin. When the couple adopted a cashless model in 2019, they were among the first Irish cafés to do so. Many others have followed suit.
“We’ve had no pressure, really, to move back to cash,” he says. “We’ve one location [at the Decathlon store in Ballymun] where we get a little more pressure for cash, but even still, it’s very little. In the other cafés, it’s not even a talking point any more.”
Deasy says that if a customer presents cash, when they are told it’s a cashless business, “99.5pc will take out a card or their phone”.
There is, he says, the odd occasion where a customer only has cash on them. “In those situations, we’d always offer the product to them anyway and we say, ‘Look, the next time you’re around, drop in and you can get us back for it and there’s no pressure’. As a result, it takes a little bit of the sting out for people — we never really leave them high and dry — and I’d say 90pc of people come back and pay.”
Review spoke to Deasy about running a cashless business in early 2020, just before the first Covid case was detected in Ireland. At that stage, one Bear Market café, in Blackrock, was accepting cash as standard. At the time, some older customers in that part of south Co Dublin were happier to pay that way. The pandemic upended that. The branch is fully cashless now.
The pandemic, Deasy says, rapidly hastened the demise of cash. “When Covid hit, it was like cashless-on-steroids. It pushed [moves to a cashless society] on by five years at least. If Covid hadn’t happened, we’d probably be getting more kickback about being cashless.”
He is not surprised to see many of the cafés that have opened for the first time in 2022 being cashless. “From a business perspective it makes sense — the efficiencies and all that — but it makes sense from a security point of view too.”
Research by Bank of Ireland subsidiary BOIPA, a provider of payment technology services, this summer found Ireland to be a more cashless society than 13 other countries surveyed, including the UK and Germany.
Irish shoppers are more likely to choose electronic methods of payment, with 63pc preferring to use cashless payments when shopping in-store, higher than other countries surveyed. The figure elsewhere was 55pc.
The popularity of paying through electronic devices continues to rise, with almost two-thirds of Irish people surveyed using mobile wallets or smartwatches to make in-store payments.
Just 3pc of people surveyed do not use card or digital payments in any situation — half the average across the other countries surveyed.
In the Bank of Ireland SME survey, businesses in Dublin were the most confident they would be cashless by 2032 (55pc). At the other end of the scale, businesses in Donegal were far less optimistic. Just 36pc believed they would abandon cash completely.
Cashless innovations are chiefly to be found in urban areas, where useful elements like 5G coverage and reliable Wi-Fi are the norm.
Some developments seem to point to an even bigger role for technology. In February this year, the country’s first ‘frictionless’ supermarket opened in Clonskeagh, Dublin. Market x Flutter is a partnership between the Compass catering group and Flutter, the parent company of Paddy Power.
Although ostensibly for use by Flutter’s workforce, anyone who downloads Compass’s Time2Eat app can shop there. Having inputted personal information and payment details into the app, shoppers tap to gain entry to the shop and then tap again when leaving. More than 90 video cameras using artificial intelligence anonymously track what the customer takes and the amount owed is deducted from their account when they leave.
“It’s incredibly convenient,” says Ciara Murray, Compass Group’s sales and retention director. “When we were developing the technology, it took four seconds at the gate. That was far too long. Now, it’s done in less than two seconds.”
Murray says the frictionless store comes into its own for Flutter’s shift workers. Rather than having to hire staff to work at checkouts at 4am, for instance, the company can instead allow employees to enter the store when they want, get what they need, and the payment is made automatically.
Murray is excited about how the technology can help transform the retail of the future. Compass introduced the idea to the King Power stadium, Leicester City’s home ground, this season. Fans with the app can simply walk into a special bar, grab their pints, and walk out. Besides the convenience, Murray says, it cuts down queuing times enormously.
While the cashless revolution is good news for many businesses, there was a period when hospitality staff in several areas, including cafés, were not receiving tips.
With no coins at hand and, initially, few ways to add gratuities electronically, they were losing out. Much of that has changed this year and Oli Cavanagh is hoping his company, Strikepay, can lead the charge. “Within 10 days of the first lockdown, I noticed I’d stopped carrying cash completely,” he says. “And I thought I was the only one, because I’m techie, but talking to my friends I found it was the same story. None of them were carrying cash.
“I counted 12 occasions where I wanted to give someone a tip and I couldn’t and I thought, ‘This is actually a huge problem for some people’. That’s when the lightbulb moment happened — I realised there was a massive opportunity.”
He quickly devised a tech solution, where the customer scans a QR code with their phone, or clicks a link sent via SMS or email, to tip. There is a small transaction fee — a key way for Strikepay to make money — and Cavanagh says 97pc of customers accept those fees.
Intriguingly, he says people are more likely to tip more when doing so electronically than in cash. “Our first couple of hundred trial customers were delivery drivers and their average tip, pre-Covid, was €1.50 on the southside [of Dublin] and on the northside it was €2. But when we introduced our system, the average tip shot up to €3.50. And since then, the average tip has gone up still further. For sure, people tip way more when they can tap with their phone rather than rummaging through their purse or the pockets for change.”
Loose change is also becoming less important when, for example, splitting the cost of a round of coffees thanks to banking apps such as Revolut and N26. These allow users to quickly send and receive money via a smartphone app and are growing in popularity — Revolut announced in June that it has almost two million Irish customers.
In fact, the service may even make the childhood piggy bank a thing of the past after announcing this week that it was adapting its Revolut Junior service. Rebranded Revolut <18, it will now allow children aged 6-17 to send and receive money. Until this point, only parents or legal guardians who created the junior account and a designated co-parent could add money to or remove it from the digital wallet.
Not everyone is enamoured by the move to a cashless society. Louisa Cameron, who runs Raven Books in Blackrock, Co Dublin, says she will always offer her customers the option to pay by cash. But, she adds, the banks don’t make it easy.
“A lot of retailers are incredibly resentful that they are having to become more and more cashless — and it’s a result of the banks,” she says. “It can be very difficult to get coins for change — the banks give us a couple of short windows each week — and I know one retailer who had to break into the charity box in her shop to give change. She replaced that money with banknotes.”
Cameron believes there should be an onus on retailers to accept cash, as it is legal tender. “There is a cost to being cashless,” she says of the transaction fees banks charge, “and a lot of people are completely oblivious to that.”
Later, she sends Review an Instagram post from Scotland’s largest secondhand bookshop in Wigtown, which spells out the impact of the charges on a blackboard. “Every time you pay by card, we lose about 1.5pc of the value of the sale. If you want to make up the balance in loose change, we will donate it to [homeless charity] Shelter.”
“We have to remember that not everyone is comfortable being cashless,” she says. “There are many people out there, for one reason or another, who prefer to use cash and I don’t think any retailer should be turning them away. No matter what happens, I will always accept cash.”
It’s a sentiment shared by a leading hair salon owner, who does not wish to be named. “There are benefits to being cashless — and the vast majority of our customers pay by card or mobile wallet — but some people prefer to pay by cash, and that’s absolutely fine by me,” he says.
“We have some older clients who prefer to pay by cash. They’re not as au fait with technology as younger people are, but they shouldn’t be punished for that. And there can be other reasons why people want to pay cash. I can think of one lady who comes in to get her colour done every six weeks and she pays by cash simply because her husband will give her grief if he sees that money leaving their joint account.”
Cash remains king elsewhere too. There’s a sizeable black market economy for certain trades, such as plumbers and handymen. “It’s a win-win for the customer too,” a freelance carpenter tells Review. “I don’t have to add the VAT amount to their bill so they get it cheaper.”
Age Action Ireland has long argued that a cashless society disenfranchises older people. “The Department of Finance’s own research shows that more than half of older persons do not use online banking,” says Dr Nat O’Connor, senior public affairs and policy specialist at the charity, “and most older persons visit bank branches on a regular basis to make cash transactions.”
The charity vociferously opposed AIB’s plans this year to close 70 ATMs in predominantly rural areas. “We know that many people manage their income through cash, literally putting aside amounts of money to cover different expenses,” O’Connor says.
“For the many people not using the internet, it is just not possible to keep track of cashless transactions and there is a risk of getting into debt that people just can’t afford when living on a modest State pension. There is also a genuine risk of financial elder abuse for those people who are not online if they are forced to seek help to manage their financial affairs.”
Meanwhile, the desire to keep track of transactions was one explanation for an increase in cash withdrawals from the British Post Office last month. The amount taken rose by 8pc on June and 20pc on the same month last year. At £801m, it is the highest amount since records began.
“We’re seeing more and more people increasingly reliant on cash as the tried and tested way to manage a budget,” said Martin Kearsley, banking director at the Post Office.
Could the cost-of-living crisis herald a surprise post-Covid comeback for cash in Ireland too? You wouldn’t put money on it.