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| What a digital money future might look like | |
| (about 3 hours later) | |
| It may not feel like it, as you rummage in your purse for the weekly pocket money, but as a nation we’ve never had more cash in our pockets – or, indeed, down the backs of our sofas. At least £70bn of cash is currently in circulation. In the past five years alone that figure has increased by 25%. | It may not feel like it, as you rummage in your purse for the weekly pocket money, but as a nation we’ve never had more cash in our pockets – or, indeed, down the backs of our sofas. At least £70bn of cash is currently in circulation. In the past five years alone that figure has increased by 25%. |
| Yet, at the same time, we’ve never had so many methods of payment for goods and services. Many families already use direct debits for their bills, and debit and credit cards could free us from those heavy coins that ruin the line of our clothes and the banknotes that are all too easily lost in the washing machine. | Yet, at the same time, we’ve never had so many methods of payment for goods and services. Many families already use direct debits for their bills, and debit and credit cards could free us from those heavy coins that ruin the line of our clothes and the banknotes that are all too easily lost in the washing machine. |
| Tangible money has a rival in contactless | Tangible money has a rival in contactless |
| So why does the family’s relationship with cash remain so strong? According to the Payments Council and Link, the organisation that runs the UK’s cash machines, cash allows people to monitor how much they spend most accurately, and it is still considered to be the easiest and quickest form of payment. | So why does the family’s relationship with cash remain so strong? According to the Payments Council and Link, the organisation that runs the UK’s cash machines, cash allows people to monitor how much they spend most accurately, and it is still considered to be the easiest and quickest form of payment. |
| Cash has a growing rival in contactless payments, which can be made with the wave of a hand. Over the past year, the use of contactless cards in the UK has nearly quadrupled – they now account for around £380m a month in transactions. | Cash has a growing rival in contactless payments, which can be made with the wave of a hand. Over the past year, the use of contactless cards in the UK has nearly quadrupled – they now account for around £380m a month in transactions. |
| Related: When is a credit card useful? | Related: When is a credit card useful? |
| But cards are unlikely to displace cash altogether. Crucially, they can only be accepted by businesses – individuals don’t have the specialised terminals. So it’s impossible to reward an enterprising child for mowing the lawn or for the tooth fairy to pay using a contactless card. | But cards are unlikely to displace cash altogether. Crucially, they can only be accepted by businesses – individuals don’t have the specialised terminals. So it’s impossible to reward an enterprising child for mowing the lawn or for the tooth fairy to pay using a contactless card. |
| The dawning of a new era: Bitcoin and digital money | The dawning of a new era: Bitcoin and digital money |
| But there’s one new technology that may one day replace cash altogether: digital money. | But there’s one new technology that may one day replace cash altogether: digital money. |
| Online payments have been around for some time – it’s relatively easy to transfer money between bank accounts electronically, or to make a purchase online using services such as PayPal. However, Bitcoin and other digital currencies – which exist electronically, not physically – allow money to be exchanged between individuals through their computers using a distributed network, without involving banks or central authorities. | Online payments have been around for some time – it’s relatively easy to transfer money between bank accounts electronically, or to make a purchase online using services such as PayPal. However, Bitcoin and other digital currencies – which exist electronically, not physically – allow money to be exchanged between individuals through their computers using a distributed network, without involving banks or central authorities. |
| Computer giants such as Apple and Google have also entered the digital money market. Apple Pay combines the convenience of contactless payment with the security of the iPhone 6’s fingerprint recognition function and Google Wallet allows people to send money with an email – the 21st-century equivalent of tucking a fiver inside a birthday card. | Computer giants such as Apple and Google have also entered the digital money market. Apple Pay combines the convenience of contactless payment with the security of the iPhone 6’s fingerprint recognition function and Google Wallet allows people to send money with an email – the 21st-century equivalent of tucking a fiver inside a birthday card. |
| A brave new future | A brave new future |
| If digital money were to take over, there would be knock-on effects in many areas of our lives, not least in the area of transparency, as all transactions would be visible – no bad thing, many would argue. | If digital money were to take over, there would be knock-on effects in many areas of our lives, not least in the area of transparency, as all transactions would be visible – no bad thing, many would argue. |
| It opens up a world of intriguing imponderables; what would happen to landmarks like Rome’s Trevi Fountain? Will buskers start carrying contactless terminals in their guitar cases? How will Great Aunt Jane treat the children to some sweetie money? | It opens up a world of intriguing imponderables; what would happen to landmarks like Rome’s Trevi Fountain? Will buskers start carrying contactless terminals in their guitar cases? How will Great Aunt Jane treat the children to some sweetie money? |
| What is for sure is that this is the dawn of an exciting new era for the way families pay for everything from groceries and clothes to holidays. | What is for sure is that this is the dawn of an exciting new era for the way families pay for everything from groceries and clothes to holidays. |
| Always consult a financial adviser before making financial decisions. Opinions expressed here do not necessarily reflect the views of Sainsbury’s Bank. | Always consult a financial adviser before making financial decisions. Opinions expressed here do not necessarily reflect the views of Sainsbury’s Bank. |
| Sainsbury’s Bank provides a range of services, including banking products, car insurance, home insurance, life insurance, pet insurance, travel insurance, travel money and savings. | Sainsbury’s Bank provides a range of services, including banking products, car insurance, home insurance, life insurance, pet insurance, travel insurance, travel money and savings. |
| We combine the shopping experience and banking by offering customers great products at fair prices, while consistently rewarding them with extra Nectar card points for choosing Sainsbury’s for their finance and shopping needs. Nectar points can be used towards travel, treats, family days out and shopping. | We combine the shopping experience and banking by offering customers great products at fair prices, while consistently rewarding them with extra Nectar card points for choosing Sainsbury’s for their finance and shopping needs. Nectar points can be used towards travel, treats, family days out and shopping. |