The use of cash as method of payment has been declining in recent years, in favor of digital methods and credit cards. Last month we saw another example in the Hawkers sunglass brand, which will not be accepting cash payments in its new Madrid store.
Hawkers, a Spanish sunglasses startup, has decided to venture into the offline market, opening a brick and mortar store that does away with traditional payment method. In other words, only credit and debit card are accepted for in-store purchases. This decision may end up being one of the first milestones on the road towards the end of cash in Spain, corroborating what Bank of Spain data are already hinting at. According to official stats, as of the second quarter of 2017 there were already 50 million credit cards and 26 million debit cards in circulation in Spain, an increase of 11% and 2% respectively in y-o-y terms.
This may be the consequence of the lowering, even removal, of minimum purchase limits for card payments at stores. The truth is that the trend to use new contactless POS and mobile payment technologies are is increasing. In accordance with Bank of Spain data, in 2016, for the first time, total POS payments surpassed ATM cash withdrawals, – €124.41 billion vs. €118.28 billion. POS payments during the second quarter of 2017 reached €33.51 billion, compared to €33.11 billion in ATM cash withdrawals.
In countries such as Denmark, many merchants have stopped accepting cash payments. The local regulator can restrict the use of cash by law, thus driving bank card usage for payments. The end of cash will change the economy and the way finances are managed, another step in line with new consumption habits in the digital era.
Proving that they are intent on keeping up with the times, Hawkers’ owners recently announced that, besides banning cash payments, they will soon start accepting bitcoin payments for in-store purchases. Bitcoin is the most popular cryptocurrency. The use of virtual currencies as method of payment remains marginal, but could become widespread in the near future, according to Bloomberg.