Sunday, 17 May 2015

Cashless society N=1

A couple of weeks ago I read an article regarding a new law in Denmark that will effectively make cash not legal tender anymore. In other words, business will not be obliged to accept cash as payment.

To me this seems fairly sensible, I really hate paying by cash, in fact I occasionally find myself struggling to remember the pin number of my debit card as I use it so rarely, so I thought I would try to analyze my cash use. The simplest way of doing this is by looking at cash withdrawals from my bank account.

I decided to have a look at what data I could use from my banks online site and was a little bit disappointed to find that they only provide the last 12 months, I could request older data but it would be printed so I decided to stick to 12 months.

This is the raw data.

As I suspected, there seems to be a decrease in the frequency of cash withdrawals, but the linear fit is pretty poor due to the various outliers.

I did a little bit of thinking and I realized that the March and September outliers are due to leaving dos from people at work and the June one was due to buying some stuff for my girlfriend at Vintage Fair. 

I decided to plot the data again but this time without the outliers.

The trend line, just a linear fit, shows a much better fit than the raw data as is to be expected.

I can easily see this trend holding true, i.e. I will continue to visit the ATM less often, due to the increasing acceptance of contactless payments and its limit being raised to £30 in September.

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