Less cash means less carbon, doesn’t it?

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 for term “contactless payment” in April and May 2020, as many businesses stopped accepting cash due to fears of spreading the virus.

Less cash

The latest data show cash payments fell by 1.7% in 2021, although it remained the second most commonly used method, used for 15% of all payments. Debit and credit cards accounted for 57%. Research by Fintech company Iwoca in December 2022 showed: 46% of small businesses use cash each month, while 32% use it every week. Over half (54%) said their use of notes and coins has actually remained stable, with 11% even seeing an increase.

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.

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. However, the more renewable energy used to power ATMs, the lower their impact.

Cards. A study commissioned by MasterCard showed that the CO₂ footprint of a card is about 21g, including the energy and water consumed in production. That’s equivalent to the CO₂ from 13 dollar bills. 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.

What about mobile? Around one third of adults are thought to use phones or watches for making payments. Little research has been done to compare the impacts of these payment methods with cards or cash.

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.

Tip. Accepting cards rather than cash doesn’t automatically mean you’re reducing carbon. Think carefully about the pros and cons. When choosing a payment device, go for something reliable and ensure you recycle any old devices as you would other electrical waste.