Role of cash and digital payments in UK

With the rapid development of technology and new ways of payment, governments are compelled to either revise current or develop new legislative frameworks and laws regarding cash, digital payments and lately cryptocurrencies. Recently, the United Kingdom’s HM Treasury opened a consultation on Cash and digital economy.

Through that document the government is seeking to get insights on:

  • How to support people and businesses who use digital payments
  • How to ensure that those who need to are able to pay with cash
  • How to prevent the use of cash to evade tax and launder money

The consultation is a first step in a debate regarding cash within the UK.  It’s clear, to the government, that digital payments can be supported without implementing restrictions on cash. It’s clear to the government as well that “ As an alternative to cash, digital payments offer consumers and businesses convenient, tailored, and flexible ways of purchasing goods and services.They enable transactions to be made online, over the phone, or in store, quickly and securely.”

Nevertheless, cash is still playing an important role for payments. For example, due to strict rules for opening a bank account, a high number of immigrants arriving to the UK each year, for whom cash is the main way of payment, are forced to use cash while they don’t have the required residency status.

In 2016, the value of Bank of England notes in circulation increased by 10%, reaching over £70 billion in the run-up to Christmas: the fastest growth in a decade”; said Chief Cashier Victoria Cleland at the Future of Cash Conference held in Vienna. It’s obvious that both cash and digital payments are on the rise. One shouldn’t exclude the other but support it, and provide UK citizens with a fair and transparent payment landscape.

Here at Pip IT we’re helping expats with services like  International Bill Pay and eDeposit. Feel free to reach out to us and together we can drive changes on financial market.

PiPiT eDeposits: Helping the Unbanked migrant to send money home

With the development of the technology sending money home has never been easier. The World Bank estimates that international remittances to low- and middle-income countries have increased by 8.5 per cent in 2017, reaching USD 466 billion (Ratha et al., 2018). This sum is estimated to grow by 4.1 per cent to reach USD 485 billion in 2018.

 

Remittances, usually understood as the money or goods that migrants send back to families and friends in their home countries, are often the most direct and well-known link between migration and development. Global estimates of financial transfers by migrants include transactions beyond what are commonly assumed to be remittances, as the statistical definition used for the collection of data on remittances is broader (see IMF, 2009).

Following the technology evolution people are now more connected with relatives and friends back home and they are now sending more money to meet emergencies, pay school fees, pay for health insurance for their families etc. With the highest number of immigrants, India is top of the list with sent remittances worth $69 billions in 2017, followed by China ($64 bil.) and Philippines ($33 bil.) Overall, low- and middle-income countries like India received record overseas funds of $466 billion.

A common problem when moving to a new country is to get a bank account. Procedures to get one varies from country to country but the common problem is that it takes time to get the back account.

The PiP iT eDeposits solution provides an opportunity to send money back home without having an account in the bank. Through our collection network, individuals can now lodge cash from the UK into their own bank account back home. They can go online and generate a barcode via one of our partners e.g. Pay Afrique. The code is sent to their phone or emailed. This is accepted in any UK Post Office and cash lodged over the counter.

For more information about eDeposit feel free to contact us today!