By Matt Clare, Chief Operating Officer at Global Processing Services
Have you ever volunteered to sell remembrance poppies? I can tell you from experience that it’s no easy task.
Outside of my day job as COO for Global Processing Services, I serve as an elected local councillor. My council colleagues and I were proud to volunteer as poppy sellers last year. There I stood outside my local train station on a typically cold but busy November morning. I expected I’d do a roaring trade and send off a handsome sum to the Royal British Legion. Instead, person after person had nothing to offer me except a sheepish, apologetic smile. They’d fumble in their pockets and come out empty-handed. “Sorry guv, no cash!” was the message. I’d estimate that only about 5 percent of people bought a poppy that morning.
It’s not that we don’t want to donate. Most of us need no prompting to part with our pennies and pounds for the sake of a great cause. We wear our poppies in proud remembrance of those brave service-people who lost their lives. If a poppy gets lost or crumpled, we’d happily shell out for another. We’d do the same for other charities if we could. The problem is that fewer and fewer of us carry cash.
Welcoming a Cashless Future
I’m one of those people who never carry cash – it was a deliberate choice I made quite some time ago. For most of us in Fintech, the demise of cash can’t come a day too soon. Even those who still hoard bank notes will see inevitable institutional benefits when cashless becomes the norm. Where there’s cash there’s money laundering, tax evasion, crime and exploitation.
Even clean cash has had its day, especially in lower denominations. As many as six in ten of our 1p and 2p coins are only used once before they leave circulation, ending up in our piggy banks or down the backs of our sofas. In fact, 8 percent of copper coins are actually thrown away.
Cash boxes, too, are becoming obsolete because they’re simply not secure. A poppy seller, standing there with a charity box in the freezing cold, is an easy target for theft – whether they’ve managed to raise much or not. The number of us doing any type of volunteering has already gone down since 2013-14. As more on-the-street fundraisers become demoralised and disillusioned, the numbers will go down even further. We may be outgrowing cash as a society, but that doesn’t mean we want to see charities suffer as a result.
Seasonal Giving Setbacks
Many charities have already tried to reduce their dependency on cash donations by moving a lot of their fundraising online. Givers are encouraged to set up direct debits, to give via dedicated donation sites and to donate at checkout when making online purchases. This works really well for charities that have a fairly flat, year-round collection model, like British Heart Foundation for example. It’s more of a challenge for charities which have a seasonal peak donation period.
The Royal British Legion holds its annual Poppy Appeal from late October to mid-November. Charities like Shelter and The Salvation Army receive more donations at Christmas than they do at other times of year. Breast Cancer Care holds its pink ribbon campaign to coincide with Breast Cancer Awareness Month every autumn. These are the charities which have peak windows of time during which volunteers pound the pavement. They’re the ones who suffer the most when we walk on by. So if cash is no longer the answer, what can we do to keep their donations flowing?
Understanding the Challenge
This is not a problem we can solve by throwing a pile of card readers at it. There isn’t a pile of card readers available, for one thing. It would be a major challenge to acquire the tens of thousands of electronic payment processors we’d need to replace donation boxes. These wouldn’t be needed year-round but only for a short window of time, so it would make more sense for charities to borrow them than to buy them. But who would be willing to loan them?
Then there’s the demographic issue. People aged 65-74 are more likely to volunteer than any other age group. They’re also more likely to have trouble using card readers than any other age group, and therefore most likely to be put off volunteering altogether.
We might think about moving the seasonal donation process off the street and into retail stores. Let’s say, for example, that retailers could add a donation amount to an in-store purchase. But donation amounts are not fixed. When we buy a poppy or a pink ribbon, we expect to pay whatever we have on hand or whatever we can afford. How can we then decouple variable donation amounts from the normal retail spend? And let’s not forget the associated fees. Every time an electronic payment is made there are fees from acquirers and processors that have to be covered, which ultimately reduces the net amount of donations. However, vendors all now have the ability to have a contactless payment device at an affordable offering.
Finding Solutions for All
If there was an obvious solution, we would have implemented it already. Finding a way forward will require some brain-power, innovation, trial and error. But it’s vital that we try, for the sake of society and even for our own personal gain. Key industry players are collaborating to deliver inclusive solutions that benefit the individual – not just the bank. It is our duty, now and in the future, to address these issues and pioneer payment services for all.
We in Fintech have a responsibility and an opportunity to target areas of the economy that lie beyond the beaten paths of consumer, employee, retail and corporate procurement. If we want to one day live in a cashless Britain, then we must consider the niche areas where cash is still lurking and still considered useful. That means helping out charities. It also means supporting the elderly and the most vulnerable, enabling them to transition to cashless with the help of secure and extremely user-friendly products.
Bringing Our Talents Together
Our industry has more than its fair share of shining talent. We’re a smart bunch who relish a challenge and excel at finding creative solutions. So I’m calling upon us to come together now and solve this latest challenge. Let’s gather the best and brightest of each sector, from payment processors to programme managers to issuers, acquirers, merchant service providers and retailers. Unless we cooperate closely, we won’t find the seamless, sustainable fixes we so need.
Together, we can save seasonal giving from the sinking ship that is cash. We can bring security and ease of use without adding cost or complexity for either charities or the payments industry. We can ensure that next year we won’t see lines of sheepish faces slinking past poppy sellers with their hands in their empty pockets. Let’s do it for a good cause, and let’s do it for our own future.