How the end of cash will make charities a new fortune
When using contactless cards, we tend to spend more per transaction than we would when using cash. That’s something charities have taken note of and are now exploiting, says Merryn Somerset Webb.
I've written here before many times about our concerns with the end of cash the way in which we are both using cash less frequently than in the past and the way in which our central banks are keen to encourage us to do so.
There are no end of problems with giving up cash. The most obvious is the way in which its disappearance affects our financial freedom and our privacy (something that is being noted all over Europe now that the EU Commission has announced a plan to "explore the relevance of potential upper limits to cash payments").
But another is that dumping cash is bad for our personal finances. A large number of studies have shown that people spend more when they use cards than they do when they use cash (card payments don't seem like real money in the same way). See my post here on the matter (one example McDonald's says that the average bill in US when people use cash is $4.50, with credit cards it is $7).
Subscribe to MoneyWeek
Subscribe to MoneyWeek today and get your first six magazine issues absolutely FREE
Sign up to Money Morning
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
Don't miss the latest investment and personal finances news, market analysis, plus money-saving tips with our free twice-daily newsletter
This is something that the UK's largest charities are now being to work out. So, never keen to miss a chance to help us finance their pension schemes, they are going cash-free.
They (Oxfam, NSPCC, Banardos, etc ) have been trialling contactless payment boxes for the last five months and have found that people using cards to transfer their money to the charitable sector give on average three times as much as those who use cash. That has something to do with the fact that the minimum contactless payment on the boxes is £2 when the average cash gift is £1 (clever). But given that the average given with the new system is over £3, it is clearly about more than just blatant manipulation.
Overall, Barclays reckons that going cashless will mean that the charities raise an extra £80m between them. I'm not convinced this is good news at all given what it means for cash itself and given where much of the money will end up (salaries, pension funds, endless OTT campaigning in expensive media).
But one upside of the way in which contactless technology is becoming cheaper and easier to use is that it may soon ease the worries of those whose activities rely on collecting small amounts of cash and taking it physically to a bank branch (of which there are fewer every week).
Not long now, and your church collection as well as your village fete takings will come contactless. No more cash. No more need to worry about having nowhere to take that cash to.
Sign up to Money Morning
Our team, led by award winning editors, is dedicated to delivering you the top news, analysis, and guides to help you manage your money, grow your investments and build wealth.
Merryn Somerset Webb started her career in Tokyo at public broadcaster NHK before becoming a Japanese equity broker at what was then Warburgs. She went on to work at SBC and UBS without moving from her desk in Kamiyacho (it was the age of mergers).
After five years in Japan she returned to work in the UK at Paribas. This soon became BNP Paribas. Again, no desk move was required. On leaving the City, Merryn helped The Week magazine with its City pages before becoming the launch editor of MoneyWeek in 2000 and taking on columns first in the Sunday Times and then in 2009 in the Financial Times
Twenty years on, MoneyWeek is the best-selling financial magazine in the UK. Merryn was its Editor in Chief until 2022. She is now a senior columnist at Bloomberg and host of the Merryn Talks Money podcast - but still writes for Moneyweek monthly.
Merryn is also is a non executive director of two investment trusts – BlackRock Throgmorton, and the Murray Income Investment Trust.
-
Tycoon Truong My Lan on death row over world’s biggest bank fraud
Property tycoon Truong My Lan has been found guilty of a corruption scandal that dwarfs Malaysia’s 1MDB fraud and Sam Bankman-Fried’s crypto scam
By Jane Lewis Published
-
Why undersea cables are under threat – and how to protect them
Undersea cables power the internet and are vital to modern economies. They are now vulnerable
By Simon Wilson Published
-
Beating inflation takes more luck than skill – but are we about to get lucky?
Opinion The US Federal Reserve managed to beat inflation in the 1980s. But much of that was down to pure luck. Thankfully, says Merryn Somerset Webb, the Bank of England may be about to get lucky.
By Merryn Somerset Webb Published
-
Rishi Sunak can’t fix all our problems – so why try?
Opinion Rishi Sunak’s Spring Statement is an attempt to plaster over problems the chancellor can’t fix. So should he even bother trying, asks Merryn Somerset Webb?
By Merryn Somerset Webb Published
-
Young people are becoming a scarce resource – we should value them more highly
Opinion In the last two years adults have been bizarrely unkind to children and young people. That doesn’t bode well for the future, says Merryn Somerset Webb.
By Merryn Somerset Webb Published
-
Ask for a pay rise – everyone else is
Opinion As inflation bites and the labour market remains tight, many of the nation's employees are asking for a pay rise. Merryn Somerset Webb explains why you should do that too.
By Merryn Somerset Webb Published
-
Why central banks should stick to controlling inflation
Opinion The world’s central bankers are stepping out of their traditional roles and becoming much more political. That’s a mistake, says Merryn Somerset Webb.
By Merryn Somerset Webb Published
-
How St Ives became St Tropez as the recovery drives prices sky high
Opinion Merryn Somerset Webb finds herself at the epicentre of Britain’s V-shaped recovery as pent-up demand flows straight into Cornwall’s restaurants and beaches.
By Merryn Somerset Webb Published
-
The real problem of Universal Basic Income (UBI)
Merryn's Blog April employment numbers showed 75 per cent fewer people in the US returned to employment compared to expectations. Merryn Somerset-Webb explains how excessive government support is causing a shortage of labour.
By Merryn Somerset Webb Published
-
Why an ageing population is not necessarily the disaster many people think it is
Opinion We’ve got used to the idea that an ageing population is a bad thing. But that’s not necessarily true, says Merryn Somerset Webb.
By Merryn Somerset Webb Published