A cashless society brings cashless initiatives for kids

Mark Jackson, Head of Financial Services
12 July 2017
By Mark Jackson, Head of Financial Services

Danske Bank recently announced the launch of a digital solution for pocket money; parents can now transfer money to their children digitally through an app, allowing both to track spending whilst teaching kids to be financially aware and responsible at a young age. Accompanying the app is a pocket money card which can be used online and in-store.   

The kids debit card company, Greenlight, also recently revealed that their smart debit card now integrates with Apple Pay, meaning as long as kids have an iPhone there's no need to carry a physical card where Apple Pay is accepted.

These new cashless initiatives for kids further demonstrate the transition to a cashless society and cashless generation - to whom the concept of withdrawing and using cash for payments will likely seem inconvenient and unnecessary in the near future.  With reports that cards now account for 54% of all retail payments in the UK, other countries are also seeing a similar trend. In Sweden, the amount of notes and coins in circulation has dropped to the lowest level since 1990 and in India, the government removed 85% of currency in circulation last year as part of a crackdown on corruption.*

In Europe too we can expect to see efforts by banks to become digital-first increase even faster in the near future.  PSD2 and open banking will further accelerate the collaboration of traditional banks and fintechs to drive innovation and ultimately, convenience. Could this added focus finally facilitate the demise of cash?  In a recently conducted survey, more than a third of Europeans and Americans said they'd be happy to go without cash and rely on digital payments if they could, and 20% already do. However, going cashless does carry some risks. Digital money can be more susceptible to security issues like identity theft and fraudulent transactions and whilst organisations make every attempt to secure their data, the increase of cashless payments can increase security risks, unless accompanied by concerted efforts to create a unified and secure digital identity.

Customer engagement in new payment methods is driven by convenience and customer experience, this is evident in the number of more convenient alternatives to cash (even for pocket money one of the most traditional cash transactions!) and while the entire demise of cash is too early to call - it is likely that the children of today will become the first generation of adults who almost never use cash. 


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About the author

With almost 20 years' experience in leading product and proposition development for a number of Financial Services, insurance and membership businesses, Mark is responsible for supporting the development and go to market strategy for innovative products and propositions that address the needs of key Financial Services clients to increase customer engagement.