In fact, statistics released earlier this month showed an 8% monthly increase in personal cash withdrawals.
So cash still has some use?
As the cost of living crisis concerns continue to mount, many of us are turning to cash as a reliable way to rein in spending. Why? Partly, because the act of spending physical money is so memorable. Finding, counting and handing over a selection of banknotes to pay for an item sticks in the mind more than a quick swipe over a card reader.
As such, consumers typically find it easier to keep track of how much they’re spending. The same cognitive bias also dictates the likelihood of us consuming items in the first place. Like those new shoes you want but don’t necessarily need - how much easier it is to impulse purchase when it’s just numbers on a screen!
And there are studies to prove it. Research has shown that individuals who pay by card have a less accurate recall of the exact amount paid than those who transact with cash. The report concluded that this recall accuracy effect typically led to overspending as “a precise recollection of past spending has an effect on the willingness to spend money in the future.”
So clearly there’s a logic behind such behaviour. But does that mean cash is a safer all-weather spending solution? Not quite.
Prone to theft, damage and misappropriation, cash carries its own set of risks. Yet having been a part of human history for thousands of years, people can be forgiven for finding comfort in the familiar. And while financial technology has evolved rapidly in recent years, it seems some of our old money habits remain.
At Dapio, we get that. And while recent improvements in payment technology is something to celebrate, there’s still work to be done.
We believe that the ambition to create smarter financial solutions should be tempered with the need to make spending feel real. By combining the ease and convenience of digital payments with a more memorable transaction experience, we can help provide more effective solutions for businesses and consumers.
While cash continues to perform a necessary function alongside its digital alternatives, it’s important for fintechs to remain open and understanding about the benefits that physical money brings.
Prior to launching Dapio Tap to Pay, we carried out extensive market research, speaking with a diverse range of consumers and businesses about how contactless payments could be improved. We discovered that one of the main drawbacks of digital transactions was that they felt too artificial, making it more difficult to keep track of saving and spending. Taking this on board, we sought to redress the balance. From providing rich data insights about historical payments, to extensively tested UI enhancements, our finished product seeks to ground contactless transactions in reality. And we’re not stopping there.
As we continue to innovate, we’re constantly on the lookout for new ways to create workable payment solutions fit for modern markets. With the cost-of-living crisis continuing to squeeze household income, it’s more important than ever to ensure that financial technology has what it takes to help individuals achieve their money management goals.
With that in mind, we pledge to keep user-need at the forefront of our core philosophy, and to keep developing and iterating products to help create better outcomes for those we serve.
To find out more about our products and services, and to learn more about our ethos, please visit: https://dapio.com/