Cash or card?

Written by Erica Salowe, researcher

Edited by Adam Shaw, associate partner

Good morning, When I first arrived in the UK in 2017, I was dazzled by the magic of contactless cards. I couldn’t fathom that with a mere tap and a satisfying beep, the weekly shopping or a metro ticket could be purchased in seconds. Back home in the US, a complex market with thousands of banks meant that our credit card technology had peaked with the chip and signature. Though some US banks finally managed to enter the contactless market in 2019, they are seriously lagging behind the likes of South Korea, Australia and the UK. I’m sorely reminded of this every time I need my signature proofed at the checkout. Yet, I can’t deny I’ve experienced plenty of instances where a contactless card was worth little more than a piece of plastic; some situations simply call for cash. At one point or another, wizened cab drivers, flea markets, and the odd small business have apologetically explained to me that they don’t accept cards. Also, people spend more with plastic; using cash and watching my wallet grow thinner is a healthy reminder to stick to a budget.  It seems I’m not the only one who is grappling with the dilemma of cash versus digital payments. Conversation is abuzz after panel members from the Access to Cash Review issued a new statement supplementing its 2019 report. They anticipate that by 2030, only one in ten transactions will be done using cash. Popularity for contactless has undoubtedly skyrocketed in the UK, with one in six people aged 25 to 34 living largely cashless. Seven in ten people in the UK own a contactless card, with many of their transactions being “tap-and-go” for purchases like sandwiches and coffee. One could certainly view the UK’s rapid adaption of contactless as testament to its capacity for innovation. However, some have expressed concerns, with fears that elderly and disadvantaged groups could be impacted by a cashless society. Limited access to ATMs and rising cashpoint fees could also complicate matters for those who live outside of cities. Members of the Access to Cash Review have appealed to the new chancellor, Rishi Sunak, pressing him for additional safeguards that would ease the current strain on Britain’s cash infrastructure. Campaigners have pushed for Sunak to introduce legislation in the next Budget on 11 March. Cash versus contactless is undoubtedly a loaded debate, with plenty of Britons clamouring to go fully digital and many others still cautious about a full transition. There seems to be little doubt that action is required to temper the situation and strike a balance that would effectively manage the cash system while still encouraging digital innovation. In the meantime, if you do prefer cash, keep an eye out for the new polymer £20 note in circulation today.


Two passengers on the quarantined Diamond Princess cruise ship have died from coronavirus. There are over 600 confirmed cases of coronavirus among those who boarded the cruise ship, which is being held off the coast of Tokyo. Those who have tested negative are continuing to disembark. Nine people have been killed and several more injured after a gunman opened fire in two shisha bars in the German city of Hanau. The suspected shooter and another unidentified person were later found dead at a home in the city. A police investigation is ongoing. In last night’s US Democratic primary debate in Nevada, Michael Bloomberg came under fire from all sides as he faced off against fellow candidates for the first time. Bloomberg was criticised for his wealth, his policies during his time as mayor of New York, and his use of non-disclosure agreements when settling lawsuits regarding alleged sexual harassment.

Business and economy

Lloyds Banking Group has announced a 26% drop in pre-tax profits to £4.39 billion for 2019. The bill PPI claims in 2019 amount to £2.5 billion, and the total paid out by Lloyds now totals £21.9 billion. Boeing has found foreign object debris in the fuel tanks of several of its 737 Max jets, further complicating its efforts to get the aircraft back in the air. The aircraft manufacturer is addressing the issue by updating instructions and employee checklists and setting additional inspections and audits. Boeing did not specify how many aircraft were found with debris in fuel tanks. Odey Asset Management has openly opposed mining group Anglo American’s £405 million takeover of Sirius Minerals, casting further doubt over the deal. The hedge fund run by Crispin Odey announced that it has acquired a 1.3% economic interest in Sirius Minerals and, unless the deal is declared “final”, it plans to vote against Anglo American’s offer. The fund has stated it will vote in favour of bids priced at 7p per share or higher. (£)

Columns of note

In The Guardian, Martin Kettle argues that Boris Johnson’s post-Brexit, points-based immigration plans are a politically driven endeavour to further polarise opposition parties. With much uncertainty still surrounding how Britain will coexist with the EU, Kettle argues that the Tory party has over-prioritised retaining the appearance of control to impress the voting public. As a result, not enough focus is being placed on how to solve challenges in the labour market that impact businesses, domestic workers, and overseas workers. With the construction and hospitality industries highly dependent on a migrant workforce, the government plan may backfire on Johnson’s extensive infrastructure plans and hospital building pledges. In The Spectator, Gavin Mortimer compares the reputations and law enforcement tactics of British and French police. He argues that although French police tactics have been criticised as heavy-handed, they face significant physical danger as they manage protests while fending off paving stones and Molotov cocktails. In contrast, Mortimer believes British police have grown too lax in their regulations and protest responses, most recently evidenced by the lack of intervention in climate change activists’ defacement of the Trinity College lawn.

Source: The Telegraph


What happened yesterday?

Investors were cautiously optimistic amidst news that the number of new Covid-19 virus cases in China dropped for the second day in a row. Confidence may be partly due to monetary policy, as the U.S. Federal Reserve expressed its intention to hold interest rates steady with the expectation that economic growth will “continue at a moderate pace”. China anticipates cutting its lending benchmark interest rate today in an effort to limit business shutdowns and travel curbs. Apple gained 1.4%, recovering some of the ground it lost after announcing that its supply would be temporarily impacted by the Covid-19 virus. In conjunction with Apple, the S&P 500 technology sector also rose 1.1%. Oil prices gained 2%, the S&P 500 rose 0.47% to 3,386.15, the Dow Jones Industrial Average climbed 0.4% to 29,348.03, and the Nasdaq Composite jumped 0.87%, to 9,817.18. The FTSE100 index closed with a gain of 1.02% at 7457.02, and the FTSE 250 ended the day up 0.80% at 21,850.86.

What's happening today?

Finals BAE Systems Morgan Sindall Group Rathbone Smith & Nephew Taseko Mines L. Interims Hays Mcbride Transense Q4 Results Smith & Nephew

AGMs IntegraFin Holdings UK Economic Announcements (09:30) Retail Sales (11:00) CBI Industrial Trends Surveys Int. Economic Announcements (07:00) Producer Price Index (GER) (07:00) GFK Consumer Confidence (GER) (13:30) Initial Jobless Claims (US) (13:30) Continuing Claims (US) (16:00) Crude Oil Inventories (US)

Source: Financial Times

Did you know?

Before alarm clocks were invented, there were “knockers-up”, who were hired to shoot dried peas from a blow gun at people’s windows in order to wake them up in the morning.

Parliamentary highlights

House of Commons No business scheduled House of Lords No business scheduled Scottish Parliament

Parliamentary bureau motions General Questions First Minister’s Questions Members' Business S5M-20548 Maurice Golden: Tackling Climate Change, the Role of Scottish Agriculture Parliamentary bureau motions Portfolio Questions Stage 3 Proceedings: Scottish Elections (Franchise and Representation) Bill Legislative Consent Motion: Terrorist Offenders (Restriction of Early Release) Bill Business Motions Parliamentary Bureau Motions