A new report has suggested that cashless payments will make up the majority of transactions by 2021.

The Future of Payments report, by Discover Global Network and UKHospitality highlights that only 8% of the world’s money now exists in physical cash, illustrating a marked shift in recent years towards electronic and mobile payments, as well as the rise of cryptocurrencies.

While the report recommends that businesses should prepare themselves as the trend for digital spending continues, it also highlights the continued need for interaction with customers. It also stresses that while cashless transactions are increasingly important, paper payments will continue to be important and should not be ignored.

“Our day-to-day interactions, including how we pay for things, continues to change as we see the technology landscape evolve,” said Soumya Dev Chakrabarty, director of payment innovation at Discover Global Network. “Discover is always looking for new ways to make the payments experience more seamless for our cardholders and merchants.”

Kate Nicholls, UKH Chief Executive, said: “Technology is rapidly changing how we live our lives, not least how we pay for things. As this new report shows, it will not be long before payments in the traditional sense will be more of an alternative than the norm; just recently, for instance, the future of 1p and 2p coins came into question. The report sets out a clear picture that businesses will need to embrace new payment methods if they are to stay competitive.

“Hospitality is about experiences and people, and how we pay is no different. Although automation aids productivity levels within businesses, this does not mean that human interaction will no longer be necessary, but rather changed in order to create a simpler, easier and more enjoyable consumer experience.”