Merryn's Blog

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.

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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").

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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).

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.

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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.

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