James Walker: Will endangered specie leave us shortchanged?

There's less than 100 days to go before the old £1 coin stops being legal tender, so I was shaking down the sofa and the junk drawers to see if I had any lying around.

Cash has been around for thousands of years and it will be some time yet before its consigned to history. Picture: John Devlin

My hidden riches turned out to be less than the price of a drink but it struck me, as I held the coins in my hand, that pretty soon we could live in a world without any cash.

Cash accounts for less than half of all payments made these days, while the popularity of contactless payments is such that apparently people are forgetting their PIN numbers across the land. Visa is reportedly running a trial where small retailers agree to only accept card or mobile payments.

Which got me thinking, are we ready to live without cash?

Technology is a wonderful thing and it’s really made our lives easier. Electronic payments allow us to track missing money and sort problems. But there are also big privacy issues that go hand in hand with all this data being collected about what, when and where you buy stuff – and how businesses are using that information.

Cash is also better in some ways for helping you balance the books. If you take out what you want to spend rather than banging it on a card you can manage your money more effectively. And new technology can be frustrating – just listen to the swearing at automated supermarket checkouts – with older or more vulnerable people disproportionately affected.

One thing that’s caught me by surprise is how careless we can get with contactless payments. How often do you ask for your receipts when you buy something? Or click the card or phone without checking what the readout says?

And of course, cash benefits charity, from collections on high streets to helping out the homeless.

But cash isn’t perfect, as anyone who has been defrauded will tell you. Handing over cash makes proving a theft or solving a dispute harder if you don’t have a legitimate receipt. It’s easier to fake (lots of those £1 coins you’ll find will be knock-off versions) and in some cases, the coins cost more to make than their value.

It recently emerged that former chancellor George Osborne toyed with disposing of pennies and 2p’s only to be vetoed by David Cameron.

And, of course, if you drop or lose your cash, there’s no way to get it back or any protection against theft.

But there’s something comforting about having those notes and coins in your purse or wallet. And using cards is strangely impersonal. Bar and restaurant staff tell me that tips have reduced as we get cynical (quite rightly) about money-grabbing restaurant chains taking a cut of their hard-earned money. I like tipping good service – and shoving a few quid on a merchant terminal isn’t quite the same.

It’s also worthwhile remembering that people have been predicting the death of cheques for years now. And though the number issued has dropped, we’re still stubbornly hanging on to our chequebooks in defiance of the banks.

I think announcing the death of cash is a little premature. Cash has been around for thousands of years and it will be some time yet before it’s consigned to history. But just as change can be a wonderful and beneficial thing, it makes sense to think about what you’re giving up, before you wave it goodbye.