Cashless Machines: Convenient or Exclusionary?

Whilst some central banks are turning to technology to solve issues with coin distribution (see CMN February), the option of using coin-operated machines is steadily being replaced in many areas by those offering cashless payment options only. These options may be more convenient, but they can come at the expense of those who rely on traditional cash-accepting machines.

The benefit of convenience can be somewhat limited when the replacement payment option acts as a preventative measure in and of itself. Many traditional pay and display coin-operated parking meters, for instance, have been replaced by those that utilise mobile payment platforms such as RingGo. Several councils in the UK, for example, have now also said that they will be phasing out the use of traditional pay-as-you-go parking meters as mobile operators switch off the 3G data networks that power the machines.

This leaves the newer machines, which rely on motorists either ringing up to pay for parking or downloading and using the mobile app. Mobile-based payment options can exclude some of the older population and those less technically inclined, as detailed by the Chair of the UK Parliament's Levelling Up Committee in a recent letter to government ministers 1.

There is also the issue that these machines rely on having a strong enough mobile signal to either call or connect to the internet and through the app, which is by no means a given. Whilst using an app to pay for parking can be very convenient when rushing somewhere – provided you have the app downloaded, access to the internet, and your payment details on file – it is arguably no more convenient than pushing a few coins into a machine to pay. Many would say even less.

Coins offer several advantages over more digital forms of payment, including:

  • No technological requirements, such as card machines or terminals, phones with internet access or mobile signal, no additional technology know-how needed.

  • Use for smaller transactions such as paying for a bus fare or buying coffee and can be cheaper for businesses in some cases, as the exchange of cash at the point of sale does not involve merchant or interchange fees.

  • Immediate payment for transactions, where vendors can physically hold their payment and do not have to wait for transactions to be processed and cleared online.

  • As with all forms of cash use and payment, coins offer privacy to pay without a digital trail.

  • Similarly, this level of privacy and security provided by cash enables more vulnerable users, the unhoused, and the underbanked to continue accessing society despite lacking bank accounts or other systems of storing and accessing money.

  • Budgeting: many people use cash, or are turning to cash, to help them budget – particularly with the current cost of living crisis. A coin jar or bag used for spare change can quickly add up.

People’s payment preferences vary depending upon transaction type and population, but coins offer an inclusive method of payment with a tangible value.

This article has not touched on the commemorative and investment side of coins, but these are also incredibly important, with many sovereign mints having an extensive history with the country’s coinage, including their commemoration of historically and culturally significant events.

Long may their mintage and use continue. 

1 -