The use of cash is dying out in some places but there are concerns that society’s most vulnerable could be left behind by the transition.
An interim report from the Access to Cash Review has concluded that millions of consumers across the UK could be left behind if the transition to a cashless society isn’t managed properly.
The Access to Cash Review has been set up to independently consider consumer requirements for cash over the next five to fifteen years.
In 2017, debit cards overtook cash as the most popular payment method in the UK for the first time. Cash use has halved in the past 10 years and is forecast to halve again in a decade’s time.
Cash use has halved in the past 10 years and is forecast to halve again in a decade’s time. However, 17 per cent of people in the UK say cash is still an economic necessity.
The Is Britain ready to go cashless? report finds that despite this increasing use of cards and electronic payments, eight million people (17 per cent of the UK population) say cash is still an economic necessity.
The interim review warns that Britain could be ‘sleepwalking’ into a cashless society and that going cashless too quickly increases the risks of threats to rural communities with poor broadband and mobile connectivity; social isolation; a rise in debt; financial exploitation; and stigma towards those who rely on cash.
The research finds that the UK is split on whether people believe there will be a cashless future in their lifetime. More than four-in-ten (41 per cent) of Britons believe it will happen, compared to 38 per cent who don’t.
Overall, consumers flagged the following concerns about going cashless:
Natalie Ceeney, Independent Chair of the Access to Cash Review, said: “The decline in the use of cash has been dramatic, and with rapid technology development and adoption this trend will continue. But for millions of people in the UK, cash is not a choice, it’s a necessity. If we don’t plan carefully for a world of lower cash – in other words, if we sleepwalk into a cashless society – millions of people will be left behind. As cash use continues to fall, we need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in this digital economy.”
"As cash use continues to fall, we need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in this digital economy."
Martin Lewis founder of MoneySavingExpert.com (a UK consumer finance information site), commented: “Many, especially the more affluent and technologically savvy, now live mostly cashless lives. That’s exactly why protecting access to cash is so important. We must learn lessons from the past. Take Directory Enquiries – technological changes saw demand drop, mainstream attention turned away, and prices rocketed – this left elderly and vulnerable who still access it ripped off. Access to cash is a far bigger issue. That’s why we must plan now, to protect those who need it in future.”
As well as gathering evidence from organisations and citizens, the Access to Cash Review has also explored the lessons learned from Sweden, where cash use has already fallen to just 15 per cent of all transactions.
The Access to Cash Review policy report will be published in the New Year, with recommendations to government, regulators and other policy-makers on transitioning to a cashless society.
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