Dave discusses an Alliance & Leicester Commercial Banks Cash Survey published recently.  Boots have given up on cheque’s, which is significant.  In Canada cheque’s were killed off in most retailers a long time ago, but in the US are still accepted. 

According to The Daily Telegraph, Boots is going to stop accepting cheque’s as they now account for only 2 in every 1,000 transactions. For our overseas readers, I should point out that Boots is a British institution, a high-street pharacy-cum-drugstore. I’m not sure, but I think the key statistic is that two-thirds of the UK population visit a branch of Boots every month. So when they say that cheques are history, others will surely follow (Shell petrol stations no longer take cheques either, so it’s not just Boots). That I can understand.

The only people I write cheques to are the kids schools, for trips and dinner money and that sort of thing (why they can’t get a Paypal account I’ve no idea) and our gardener.

Source: Digital Money Blog: Cash is still king

In Canada debit is prevalent, but just getting going in the US.  Interestingly the retailers in the survey prefer cash, then credit then debit, which sounds counter intuitive.

But why do retailers think that cash is cheaper? I wonder about these figures: it must cost Boots more than zero to count, bag, deposit, guard, store and transport cash. Perhaps it’s a function of size: the SME’s quoted in the Alliance & Leicester survey may regard administration and bookkeeping an unnecessary overhead when applied to cash and may perhaps sometimes skimp on the record-keeping, whereas Boots do not.

Another small stat … I haven’t seen this in writing, but apparently the largest user of cash in Canada is Tim Hortons coffee shops.  Their use exceeds all vendors, and banks.  Even if its not entirely true, its indicative of the development of a two tier system, and banks will not necessarily be synonymous with cash.

Relevance to Bankwatch:

This survey is typical (imho) of the noise to be expected while we go through the dissonance of change.  I see a cashless society being inevitable, for certain customer segments.  With products such as Cardis gaining mass acceptance, and those areas that debit is already embedded, its a simple shfit, much as credit is the premier payment vehicle for a certain affluent segment today.  A

 two tier system could exist for some time though, but the players representing the tiers may not be as obvious.