Will paper currency still be relevant in a few years' time?

Could cash soon become as irrelevant as Monopoly money?

As paperless begins to take over the NHS and local authorities up and down the country, questions have started to be raised about how relevant physical cash can remain in the years to come.

Online banking systems are already accessed around seven billion times each day by British consumers, according to figures from the BBA, while Bank of England chief economist Andy Haldane recently hinted that a digital Bitcoin currency has the potential to replace cash and fuel economic recovery.

What's more, retail and restaurant outlets are increasingly offering customers the option to pay in a completely paperless way, with no bill and no receipt, just a digital money transfer.

So, could banknotes become as irrelevant and worthless as Monopoly money in the near future?

Rise of the Bitcoin

Bitcoin is a digital currency that is both created and managed electronically, with no single central authority overseeing its dealings. While this makes it challenging to keep track of exactly how many people regularly use Bitcoin, the media attention and hype surrounding the currency have soared in recent years.

Figures from Blockchain show that more than 15 million Bitcoins are currently in circulation, with this likely to only increase further as paperless ways of thinking and digital transactions replace traditional methods more often in the future.

In addition, Andy Haldane of the Bank of England explained earlier this year that a digital currency could in fact be the answer to the UK's economic crisis.

He suggested that the problem of investor hoarding could become a notion of the past if cash was abolished and replaced with a completely digital economy, stating: "What I think is now reasonably clear is that the payment technology embodied in digital currency Bitcoin has real potential."

They also say that you know something has hit the big time when it's parodied­ a digital currency entitled Coinye West, inspired by rapper Kanye West, was launched in 2014. 

Out and about

Yet it is not just in the complex financial world where digital currency is increasingly favoured. Diners who visit restaurants including Ask Italian and Wagamama are now being given the option to pay for their meals in an entirely paperless manner. When they ask for the bill, instead of being handed a paper slip totting up how much they've spent, they are given an iPad or tablet to complete their transaction on, with no option for a paper receipt.

In fact, MasterCard Labs has developed an app to help with this, entitled Qkr!, which is set to be rolled out in Zizzi and Carluccio's restaurants in early 2016.

Scott Abrahams, group head of acceptance and emerging payments at MasterCard UK and Ireland, explained: "Asking for the bill and waiting to pay shouldn't get in the way of a good meal. Now, customers can spend more time enjoying their food and get to their next appointment more easily."

Retailers including John Lewis and Marks and Spencer have also begun to give tablets to their staff to allow them to order out ­of­ stock products on the spot with no need for forms to be filled in or receipts to be printed, benefiting both the customer experience and the environment.

This highlights that paperless doesn't just have to be a B2B priority ­ it can have significant advantages for the B2C market as well.

Managing money digitally

Online banking increased in popularity by 40 per cent between 2010 and 2014, according to figures from the BBA, with more than 1.1 billion account enquiries taking place over the internet during this four ­year period.

Digital money transfers are also growing in popularity, thanks to services such as Transferwise and Western Union, which allow customers to send cash from their bank accounts around the world in a totally paperless way.

It is evident that the need for physical cash is waning, providing weight to the theory that paperless money could indeed soon become as irrelevant and worthless as Monopoly money in a few short years' time.

Although this raises concerns around data protection and cyber security, these worries can be eliminated with improved password protection, with the same applying to all documents that are scanned and stored via the cloud in a paperless fashion both at home and at work.

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