Over half of all charitable donations are made in cash – but that number is dropping, says the UK Card Association. With fewer people carrying cash, will contactless be at the heart of charitable donations?
Last year, a futurologist told PaymentEye that a good way to gauge the convenience/penetration of a payment method was to run a quick thought test: how easy would it be to give a pound to a homeless man on the street using that method? Naturally, giving a £1 coin is the quickest and easiest way. Anything more modern like cards or any form-factor based on the card rails (mobile, wearables) is nigh on impossible.
Obviously, this is by no means a standard test, but it is still quite useful because it reminds us that whilst newer payment methods are incredibly convenient for things like food shopping and travel, a lot of organisations, and more importantly people, rely on cash.
Reliance on cash is a risk
But this reliance on cash is putting them at risk, none more so than charities. According to the UK Card Association, over half of all charitable donations are made in cash – but that number is dropping.
This is not surprising given that people are moving away from cash: a third of the UK population believes cash will disappear within the next 15 years, according to a Starcom study. Another report found that a quarter of UK adults have used mobile payment services, a number that will undoubtedly jump following the launch of Android Pay in the UK. The report said the majority of respondents under the age of 44 expects cash to be displaced by newer payment methods in the next few years.
More pressingly, figures show that people are becoming more and more confident in using contactless cards for lower-value purchases. This has had a profound effect on behaviour as the concept of a big weekly shop is becoming dated, with people instead electing to make more frequent low-value top ups.
“We started having discussions with charities last year after it became clear that cash donations were falling and there was a need to find alternative donations,” said Briony Krikorian-Slade, of the UK Cards Association.
It is becoming clear that, as people start to carry less and less cash – in particular coins – traditional ways of collecting donations through charity boxes and boots-on-the-ground is becoming unsustainable. So what can be done?
The most obvious reaction is to go with the flow. That is what bodies like the Barbican are trying. Its gallery in London will become the first in the world to set up contactless donation points.
The Curve gallery will install a contactless terminal in September at its entrance where people can make a donation simply by tapping their cards or NFC-enabled smartphone devices.
“People are already increasingly comfortable with contactless transactions in a commercial environment and on the transit network in London, and so the transition to the charitable sector should be a natural one for many people,” Nick Adams, Barbican’s spokesperson, told PaymentEye.
For now the donation amount is set at £2 but that amount may vary depending on the audience and type of exhibition. Also, as Nick said, “Visitors are welcome to donate more than once if they wish!”
The gallery will continue to accept cash donations, but Nick also said that the gallery will keep the contactless terminals if the method proves to be successful and will add more around the Centre.
The Centre’s wider objective, as Nick says, “is to encourage a growing culture of philanthropy at the Barbican, generating vital funds for new commissions, free events and creative learning projects”.
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