Springfords LLP blog

Some news, views and comments about everything and anything, relevant and irreverent.

Should paying be a contact sport?

23 July 2014

The generation born today will never have a pound in their pocket.  Being out of touch with cash in the age of swipe to pay could spell financial disaster. 

There aren’t conductors anymore, except maybe Esa-Pekka Salonen and Carl Davis.  If the flying Finn or the hirsute American took a second job as a Blakey from “On The Buses”, neither would be calling for “all tickets please.”  It would be “debit cards and contactless payment methods please”. “No chip and pin?  C’mon - get off ...”

It’s starting to get difficult to get on a bus with cash in hand - Transport for London went cashless earlier this month - and those cash machines on the platform in Manchester, Edinburgh and elsewhere prefer a debit card for your (paper) tram ticket.  Even things that cost sweeties - like sweeties for example - can be bought without a debit card touching the sides of a payment machine

Does all this swiping and swishing leave a bitter taste though?

Retailers love it.  Seconds saved at the till all mount up to more turnover and, as Barclays Bank discovered in a recent survey in The Times, younger buyers are more likely to make that impulse purchase if they can make it with the added convenience of an electronic impulse, rather than fishing about for some spare change.

Cash is just another aspect of the publishing industry that's in decline.  These days, even those nostalgic for the printed word can buy their daily newspaper with the swipe of a near field enabled smartphone.  There’s no need to go through the labour of searching for the coins down the lining of your jacket.  Cut out that middleman called wallet, and you’re in and swiped out in seconds.  For the shopkeeper it’s more transactions and more turnover, the customer is processed faster than you can say “don’t you need my PIN?”

The convenience store just got even more convenient, and the younger generation love it.  The charity Pennies - who absolutely do love small change by the way - has found that payments of under £5 by card or smartphone are no problem for at least three-quarters of 16 to 24 year-olds.  Some have even turned on their heel if they were denied smart payment options.

So, where’s the problem?  Well, there isn’t one, if you’re careful, diligent, prudent and have a sense of what your future might hold. 

Those of us old enough to remember a brown windowed envelope with a handful of banknotes and a staple through the middle, handed over by a stern wages clerk warning you to “check it now or it’s your lookout”, will better understand the link between wages and savings.

It’s different now.  Even wages are a contactless transaction.  It’s all electronic funds transfered to a nominated account, ready for spending without any blood on the banknotes from prising out the said rusty staple.  Savings to shopping without touching the sides of a cash machine.   So there you have it - smart payments puts your bank account in your pocket - all of it.  No problem though, as long as you have the wisdom of Solomon, the frugality of Scrooge, and the austerity of George Osborne - all characteristics you’d readily associate with the first flush of youth – or maybe not.

Thereby hangs the disconnect from cash and savings, replaced by instant access to total reserves.  If you can empty your bank account without even having to touch so much as the bank card that facilitates it - the option to over indulge is as tempting as the sweeties on display at the convenience store till. 

Be careful.  For contactless read cashless, and not always in a good way.


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Some news, views and comments about everything and anything, relevant and irreverent.

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