Last year, cash was knocked off its perch. For the first time there were more payments by card than by coins and notes in UK retail transactions. One of the main drivers was growth in the use of contactless technology: 10 years after its arrival, it now accounts for about a third of all card purchases.
The shift to cards, phones and wearable tech could change the game for charities that rely on cash donations. Research by Barclaycard earlier this year found that one in seven people had walked away from a donation opportunity at least once in the preceding year because they were unable to use their card.
Most charities have yet to test contactless payment for donations, but some are embracing the technology. Last year, Cancer Research UK held contactless collections in 16 different locations for World Cancer Day, and it now has five "smart benches" in London that allow people to donate using their contactless cards. The animal charity Blue Cross also tested the technology last year by attaching contactless card machines to the jackets of a team of dogs. At the end of last year Oxfam and the NSPCC tested Barclaycard portable payment boxes, which incorporate contactless and chip-and-PIN technology, against traditional cash buckets. The contactless machines were programmed to receive a set amount, such as £2 or £3, but that could be changed if someone wanted to give a different amount.
Overall, Oxfam found that the cash buckets raised more money, but in certain situations contactless was almost as popular. The charity's head of digital fundraising, Matt Jerwood, describes contactless as "good to be part of but not currently winning our next-big-thing award".
The NSPCC also found that cash still won overall. Crucially, however, it found that the average donation was higher with contactless, and it occasionally received very large payments through chip-and-PIN - in one case, £1,000. The charity found that younger people and those who worked in London used contactless the most.
One of the biggest barriers in the Oxfam trial was people's willingness to try the technology, Jerwood says. Donors had to be encouraged to use contactless, and even then there were issues of trust. People would ask "has that payment gone through?" he says. "So we realised we needed audible beeps to let them know it had worked."
Then there's the cost of rolling out contactless technology. The pilot schemes have largely been funded by card payment providers, so charities haven't had to cover the full costs.
Paul Horlock, payments director at the Nationwide Building Society, estimates that leasing a contactless terminal costs about £130 plus VAT each month. On top of that there are transaction charges of a few pence per donation, he says. But although the costs might seem high, handling cash and keeping it secure also incur costs. Charities might be able to negotiate preferential deals with acquiring banks, which process the charges, Horlock suggests.
"If charities get proactive and talk to the acquirers, they could get a really good deal," he says. "They might even get it for free."
But some charities are yet to be convinced about the merits of contactless payment. A spokeswoman for Samaritans said it had not yet explored its use in its face-to-face fundraising. Neither has the RSPB. The bird charity says: "That's partly because out on nature reserves - where we do a lot of our interaction with supporters - there is poor or sometimes no internet connection."
Meanwhile, technological change keeps on accelerating. The NSPCC ran a small pilot of wearable tech in August. This involved shoppers wearing NSPCC contactless wristbands that they could use to pay for their purchases. Depending on their preferences, purchases were rounded up to the nearest pound, giving the charity the extra amount. Alternatively, a percentage of each transaction was given to the charity. Users were able to cap the amount they gave in their preferences.
But how can smaller charities get involved? The answer seems to be to partner with one of the companies that trials the technology. Donate the Change, which supplied the wearable tech to the NSPCC, says that half of its launch partner charities are small, including the two medical charities Harrison's Fund and Charlotte's Bag.
The online fundraising platform JustGiving has been carrying out trials of a contactless giving system called TapDonate with charities of all sizes. This has two approaches: a contactless collection bucket that also accepts cash, and a lanyard that accepts only contactless donations. And the electronic payments provider Worldpay recently launched an app that accepts face-to-face contactless card transactions on a smartphone without the need for additional payments hardware. The technology is being piloted among up to 50 micro-businesses in London this year.
"The rate of banking innovation is accelerating," says Horlock. "In 10 years' time we might be paying biometrically." Charities will need to keep up or risk losing out.
Daniel Fluskey, head of policy and research at the Institute of Fundraising, says: "We know this is an area that lots of charities are looking at, and some have moved faster than others. As with all new technology, it will take a while for it to get to a tipping point where it becomes widespread."