According to data from Capgemini and BNP Paribas’ latest World Payments Report, non-cash transactions grew by 10.5 per cent in 2017 alone, accounting for more than 552.4bn transactions across the world. The report predicts this number will escalate to more than 725bn by 2020, and it appears Revolut CTO Vlad Yatsenko agrees.
“Businesses, especially financial institutions, are having to adapt as we move towards a cashless society,” said Yatsenko. “With the rise of blockchain technology, contactless and mobile payments, I hope and believe that it will be possible for the UK to be fully cashless within the next 10 years. That is why Revolut are creating a number of features that to make it even easier for our customers to make secure, cashless payments.”
Indeed, there is no doubt that the rise in cashless payments has contributed a great deal to the success of many digital banks, many of whom place a great deal of emphasis on cash not being needed to carry out daily financial activities.
In Sweden, 36 per cent of the population has claimed they never use cash, and a further 25 per cent say they use it just once a week. This is a fall of 63 per cent from data published in 2013. In fact, cash is now used in less than 20 per cent of transactions in Swedish stores, with the amount in circulation dropping to its lowest since 1990.
Yatsenko continued: “If the UK aspires to be fully cashless, we need to continue to innovate and encourage the use of financial technology. Ideas such as banning coins and banknotes on buses have now been in force for several years, while market traders, street vendors and more now accept card and phone payments.
“Unfortunately, UK infrastructure lacks behind countries like Sweden, and our relatively large population isn’t an ideal test-bed for cashless innovation. We’ve still got a long way to go until lumbering traditional banks fully adopt cashless technology, and even then not all consumers tend to trust the big banks or institutions with their information or money.”
The UK is slowly adjusting to a cashless future, with 41 per cent of cards in circulation now having a contactless functionality. But compared to Sweden, just 17 per cent of British shoppers say that, on an average day, they don’t use any cash at all. The UK is expected to fall to its fellow European levels soon enough, with a predicted cash usage of 25 per cent predicted by 2025.
Outside of Europe, big tech players like Singapore, China and Canada have also gone relatively cashless, with each of them sitting at around 56 per cent for non-cash transactions annually. Smaller and less-developed countries are also proving quick adopters, such as Somaliland which saw its mobile payments increase to around 50 per cent in 2017.
Many digital banks have now begun to place fees on withdrawing cash abroad, due to the high cost surrounding the use of ATM networks outside of the UK. A recent product from Revolut, in the form of its disposable virtual cards which aim to ensure higher security when shopping online, are a prime example of its efforts to reduce cash transactions.
Last week the neobanking app launched its business banking API to third parties, making way for the kinds of partnerships we might expect to see on its future business banking marketplace Revolut Connect.
Rumours are also swirling that Revolut has been meeting with investors in recent months as it prepares for its next fundraising round, which is expected to raise another $250m. As a result, the banking app's valuation is expected to quintuple to $1.4bn, up from its 2017 valuation of $200m.