Is the cashless society a risk to charities?

By Patrick Nash

A recent study by The Pennies Foundation has found that the UK is moving closer to becoming a cashless nation, with one in ten 25 – 34 year olds admitting that they often do not carry cash.

New payment technology such as swiping your mobile phone to make transactions under £15 – which is now widely available at outlets such as McDonalds, Subway and some Boots stores – is making the cashless payment even simpler and faster.

But with considerable funds currently raised through coin collection boxes and tins, is the potential cashless society a risk to charities’ fundraising potential?

The Pennies Foundation study found that it is not only younger people choosing alternative payments to cash; a third of us now leave the house without cash on a daily basis.

For cashless exchanges to really take off, retail experts say there must be tangible incentive for customers to use the technology, such as discounts, faster moving queues in store or, possibly a charitable donation made by the phone manufacturer for money spent using the new system.

There are also a number of concerns linked to the rise of the cashless society. Security is clearly an issue where mobile phones – already attractive to thieves – also double up as wallets. And not everybody will relish the thought of every purchase you make being visible to phone manufacturers, and the prospect of where that data could end up.

But, with considerably less of us bothering with coppers and silvers, and more than half of us noticing less charity boxes than there used to be, it seems the good old days of dropping our loose change into a charity tin and feeling like we’ve done our bit might soon be coming to an end.

One thing is for certain; charities need to evolve and adapt to the cashless environment to keep donations coming in. But how?

Smart technology has been developed that allows people to use their phones to donate the ‘spare change’ in their bank accounts to charities. But this is very much in its infancy and it remains to be seen whether this will take off.

Further creative ways of digitally donating are emerging – such as registering with websites like Easy Fundraising, a service that automatically donates to users’ selected charities when they shop online. With the rise in online shopping – 26% of purchases will be made online by 2016, worth a staggering £221bn – this could help increase charitable donations as long as people bother to register and continue using it.

Other popular websites, such as eBay, offer the opportunity for sellers to register selected charities, and for buyers to tick a box to choose to make a donation to that charity as the purchase details are finalised.

With many types of online systems being put in place for charitable donations, the challenge for charities is to educate and persuade people of the value of making the effort to link their online shopping profiles to these systems.

It requires a significant change in behaviour, so messages appealing to different motivating factors need to be developed and reinforced consistently.

It may well take time for cashless payment systems to really take off, but charities can prepare by ensuring that they innovate and think creatively about persuading the public to part with their digital pennies in the future.

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