Is going cash-free a low carbon option?
Covid and cash
Around 3m small businesses were still thought to be cash only before the pandemic. COVID has turbo-charged the move to cashless transactions though. Google reported a 300% increase in online searches “contactless payment” in April and May 2020 as many businesses stopped accepting cash due to fears of spreading the virus.
The share of payments made by card increased to 52% in 2020. This was due to many retailers encouraging card and contactless use, along with lockdowns resulting in more online shopping. Contactless payments jumped 12% to £9.6bn with small businesses leading the charge.
Pros and cons
It’s an easy option for an individual to go cashless , but shifting your business is more of a challenge. Some demographics and organisations still rely on cash. You need to weigh up the pros and cons.
Tip. Carefully consider your customer base and look at what competitors in the area are doing. You don’t want to lose sales (cash is still used for millions of small transactions) but equally you don’t want to be seen as a “dirty” business. If you keep accepting cash, then train staff handling money about the nature of the hazards.
Is it low carbon?
The disappearance of coins and notes could also have another advantage. Cashless means no trees, no paper, no transport and therefore less carbon. Or does it?
Cash. With cash you have the production and transport energy, but the greatest impact with £5, £10 and £20 notes is the energy consumed by ATMs, according to a Bank of England report (see The next step ). However, the more renewable energy used to power ATMs, the lower their impact.
Cards. A study commissioned by MasterCard in 2017 showed that the CO2 footprint of a card is about 21 grams, including the energy and water consumed in production. That’s equivalent to the CO2 from 13 paper notes. However, the card’s footprint is increased due to transportation and disposal, e.g. incineration. When using a debit card, the biggest factor is the payment device, principally the materials used to make it, e.g. rare earth metals, and the energy to power both the machine and the databases behind it. A study in the Netherlands showed that the footprint could be reduced by use of renewable energy, reducing the standby time of the payment device and increasing the life of the cards (see The next step ).
What about mobile?
32% of adults have phones or watches capable of making payments, according to UK Finance. Little research has been done to compare the impacts of these payment methods with cards or cash.
Tip. Accepting cards rather than cash doesn’t automatically mean you are reducing carbon. Think carefully about the pros and cons. When you are choosing a payment device, go for something reliable and ensure you recycle any old devices as you would other electrical waste.
For a link to the study, visit https://www.tips-and-advice.co.uk , Download Zone, year 16, issue 03.
Create your profile to unlock this advice and many more.