The revolution will be digitised

Retailers are already using the technology on a massive scale and within the year many Scots will able to commute to work with just the tap of a card.

First Bus announced last week they will “complete implementation of contactless payment across the UK" by 2018, while Stagecoach is looking to introduce it in Scotland this year.

There has clearly been a rise in demand – use of contactless card payments in Glasgow increased by a massive 243 per cent in 2016, according to data released by Barclaycard. In Edinburgh it was 206 per cent.

Duncan McCann, researcher at New Economics Foundation, said that while a move away from the pound is “unlikely”, there’s a “big opportunity in Scotland” to do something different.

He said: “Scotland was the most exciting place in the world to be in 2014 because it wasn’t just nerds and technical people talking about money in back rooms. From teenagers to the elderly, people were discussing money and currency.

“The move to a digital technology is a natural evolution that all our societal technologies are going through. We still have a monetary culture that focuses on the system. Now different payment systems and different structures are emerging – such as Scotcoin – which make for more of an ecosystem of moneys.”

Willie Fleming, is a director of Scotcoin, a digital currency not controlled by any government or central bank. He believes that while the shift towards digital transactions is “positive” adding that digital currencies would help “level the playing field”.

He said: “Most people don’t realise that over 90 per cent of all money is electronic anyway. Digital money is simply the natural evolution. Twenty years ago the internet gave us the means to freely exchange information. Now, digital currency gives us the means to exchange value. Small businesses would gain from fast, easy transactions without bankers skimming on every transaction.”

Despite the global direction of travel, McCann acknowledges that there are still obstacles to overcome before cash can be disregarded entirely in this country.

“In Sweden, Big Issue sellers take card payments,” he said. “I do not think the same thought has been given to homeless people and those at the bottom here. It is a difficulty that needs to be overcome for the system to be fair.

“Still, the UK is moving towards it slower than in some places. There is still a reasonable amount of revenue printing pound coins and notes. To remove cash entirely would be to dent our public revenue – they would need another source of revenue for central banks.”

A recent study by MasterCard found that 47 per cent of Britons typically carry less than a fiver on them at any time. While only one-in-five people think wallets will be obsolete in the near future, this rises to a third of people among 25-34 year olds.

So who benefits the most? Bernardo Batiz-Lazo, Professor of Business History and Bank Management at Bangor University, said that “the big winners of the elimination of bank notes are banks and credit card companies”.

An entirely cashless society would see businesses foot the bill for transaction fees – meaning small businesses could be among the hardest hit. But the elimination of cash would also lead to lower insurance premiums for them as no money would be held on the premises. Businesses would also be better protected against robbery.

However, there are fears that some of society’s most vulnerable groups could be left behind by a cashless revolution.

Dr Niall McKenzie, a lecturer in entrepreneurship at Strathclyde University, warned that “the poorest in society could be the biggest victims. We need to make sure any digital transaction system is accessible to all. Older generations could also struggle to adapt. It’s a massive adjustment from the dominant form of transaction. It may be difficult.”

Derek Young, Senior Policy Officer with Age Scotland, said: “Only around a quarter of over-65s own a smartphone, and many of those that do prefer to use only limited functionality on them.”

But worldwide nations are increasingly embracing the cashless model. In Sweden the use of cash has steadily declined, dropping by 40 per cent since 2009. Public transport is entirely cashless, with many restaurants only accepting digital payment and many banks not even allowing withdrawals or deposits.

Many Swedes do not carry cash at all, preferring to use debit cards or the digital transaction phone app Swish. The service, developed with input from Sweden’s major banks, allows users to transfer funds instantly using their phones.

Following the Swedish example, India is the latest country to embrace the cashless revolution. In November, Prime Minister Narenda Modi announced that all 500 and 1000 Rupee notes would no longer be accepted as legal tender – this previously accounted for 86 per cent of all cash in circulation.

The policy has been introduced to target ‘black money’, cash that Indians have stored at home and refuse to pay tax on. Just one per cent of India’s citizens paid income tax in 2013, according to a government report released last year.

Scots are more sceptical than the rest of the UK (bar Northern Ireland) about the safety and security of cashless payments. A survey by Cartridge Save found that 70 per cent would not be happy with government agencies, intelligence services and tax agencies being able to track every transaction they made. The figure for over 65s was 77.5 per cent.

But do Scots really expect the UK to go cashless?

Robert Murray, 61, a Glasgow night porter said: “I would not like it if the UK went cashless. I still like the choice and think people mostly do. I don’t think it will happen.

“I probably use my card more often now, though. Even if I go for my messages I tend to use the card now.”

Rose McMullin, 33, a sales assistant, was more enthusiastic at the prospect. She said: “I think Scotland will probably go cashless and it probably would not bother me too much. I very rarely use cash and only really use it for kids’ birthday parties."