Cashless society rising as no new 2p or £2 coins to be made for 10 years

By Sunniva Kolostyak

The UK’s coin producer, the Royal Mint, has announced that it will not be producing any new 2p or £2 coins in the next decade as the pandemic fuels the rise of a cashless economy.

According to the National Audit Office (NAO), demand for coins has dropped, leaving enough in storage for the next ten years – in contrast to banknotes.

Between 2008 and 2019, there has been a 59 per cent decline in the volume of cash payments in the UK, while the forecasted reduction between 2018 and 2028 is 65 per cent. There has also been a 65 per cent reduction in the annual volume of coins purchased by HM Treasury from the Royal Mint between 2010-11 and 2019-20.

In its report, NAO said: “Over £100 billion is spent in shops using coins and notes every year and until 2017 cash was the most frequently used payment method in the UK. The use of cash in transactions is, however, in decline: 10 years ago, cash was used in six out of 10 transactions, and last year it was less than three in 10. Forecasts have suggested that this might fall to one in 10 by 2028. A recent drop in the use of cash during the COVID-19 pandemic may accelerate that trend.”

According to Scott Galit, CEO of global digital payments platform Payoneer, the global health pandemic and social distancing measures have been rapidly fuelling the rise of the cashless economy.

Digital payment methods will be playing a number of key roles going forward, Galit explained – offering a safe, convenient alternative to handling paper cash in retail stores, enabling digital commerce, and eliminate manual processes while their teams operate remotely for B2B companies.

“The transition to a more digital economy also opens up incredible opportunities, democratising access to the global economy for any business or individual with something of value to offer to the world. Thanks to the digital economy – which is fuelled by cashless transactions – professionals and small business owners around the world can sell internationally just as easily as they do domestically.

Galit noted that there are also increasing opportunities for freelancers, according to Payoneer’s Freelancer Income Survey, which highlights that the average global hourly rate of digital freelancers is significantly higher than the average earnings in many of the countries where the industry is booming.

“Moreover, the earnings gap is smaller between genders, education levels, and age groups for digital freelancers than generally seen around the world – all pointing to the digital economy’s promising role as an equaliser and a pathway to opportunity. It is imperative that financial inclusion be the goal of every government and economic system, so that the trend towards a cashless society becomes a rising tide that lifts all boats,” Galit said.