/ Money

Are we sleepwalking into a cashless society?

Going fully cashless will leave millions behind – do you agree with the steps the Access to Cash Review is recommending?

This is a guest post by Natalie Ceeney CBE. All views expressed are Natalie’s own and not necessarily shared by Which?. 

Britain is not ready to go cashless. While many enjoy the simplicity and convenience of digital payments, they don’t yet work for everyone.

Our research found that around 17% of the population – 8 million adults – would struggle to cope in a cashless society.

Which? News: access to cash under threat

There is a widespread (and incorrect) perception that the main issue is with the old. In fact, the biggest indicator of being dependent on cash is poverty. Many people simply can’t take the risk of getting into debt, and cash remains the safest way of budgeting.

But we are fast moving away from cash. A decade ago, over 6 in every 10 transactions in the UK were in cash. It’s now down to just 3 in 10, and could fall to around 1 in 10 in 10-15 years.

Bank branch and ATM closures

We have an expensive cash infrastructure built for a world of high cash volumes, which is becoming unaffordable as cash volumes decline. We are already seeing cracks appearing with closures of bank branches and ATMs, but this is just the tip of the iceberg.

Today’s recommendations are built on a huge amount of analysis and data that we’ve gathered, not just from the UK, but also overseas.

We’ve taken into account a wide range of evidence, speaking to more than 120 organisations, including Which? and other consumer groups, as well as talking to thousands of consumers directly.

What we’re calling for

If we do nothing, we will have communities unable to access cash, and unable to spend it. We’re calling for:

A guarantee of access to cash

Cash access to be kept free to consumers

An investigation into the costs of banking cash for small businesses

A requirement for essential and monopoly services to accept cash

Rethinking infrastructure

As cash is free for consumers, we don’t tend to think much about the costs. But behind our ATMs and shops is a complex and expensive infrastructure costing around £5bn per year.

This was built for an age of high cash, and for profit. It’s now expensive to operate and, as cash declines, becoming uneconomical. If we want to keep cash viable, we need to think radically.

There are examples in Sweden, Norway and Finland that we can learn from. As their cash use has declined, they have created a joined up ‘utility’ for the wholesale infrastructure supporting cash, to keep cash viable.

We’re calling for the Bank of England to convene a group to develop a radically different model for the wholesale management of cash.

Policy and regulation

We can no longer take cash for granted. We need clear government policy on cash, a programme of work to develop digital payments which can include everyone, and a joined up oversight and regulation of cash.

Cash can no longer be seen as just a commercial issue. We believe that our recommendations will help keep cash viable for consumers, in a way which industry can afford.

But we now need action, before it’s too late – before we lose our cash infrastructure and millions are left behind.

This is a guest post by Natalie Ceeney CBE. All views expressed are Natalie’s own and not necessarily shared by Which?. 

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Do you feel that we’re sleepwalking towards a cashless society? How could we be more prepared?

Shaheena Sozugecer says:
6 March 2019

I object to the bank, advertizers and government having access to our every penny. I don’t want every penny I have tracked and accountable to government and the bank just because they can’t manage ‘obvious’ fraud and security with in the country. Ordinary people haven’t the means to pay-in or transfer thousands of pounds each month yet I am questioned when paying in a couple of pounds cash when I need to.
Cash in your hands also gives you a better feel for the cost of things. It’s not just numbers on a computer screen. I think that younger generations are actually in more debt now than they have ever been because the don’t use cash and have never learned how to budget and live on what they have in their hands.
I also don’t trust technology either. If ever there is war or cyber attacks what happens to our ‘Numbers’ I mean money then?

Emila Harts says:
6 March 2019

Shaheena you are so, so right on every aspect. Technology is not safe from cyber attacks or just plain breaking down. If we keep cash and one person lost their wallet one person is effected. If a cyber attack takes place or a simple software error, thousands of digital wallets would be effected. Banks also want to move towards negative interest rates and they can only get this by doing away with cash. Once we go digital a bank can charge you what they want to hold your digital money. Which means you will get no interest on your money whatsoever

Ronaldus says:
6 March 2019

It seems that the least well-off are always charged the most – for instance, for energy. Similarly, the smallest local businesses can’t afford websites and digital payment facilities. Our window cleaner and our plumber wish to be paid in cash and this suits us best too. Those with the least political clout must be protected.

Glynis Cheers says:
6 March 2019

It is essential to still be able to access cash even if we are suing more electronic methods. My late mother had carers coming in to do her shopping and because of dementia she was unable to use cards or cheques and certainly not on line banking. The care company would only accept cash against a receipt for her shopping and so this was her life line. I undertake paid therapy work form home but because this is very intermittent it would be completely impractical for me to warrant a card machine and cheques are no longer guaranteed. In any event we do not get mobile signals in my village which many systems work off.
I am an associate lecturer and many of my younger students are telling me that they have cut up their credit cards because they prefer to use cash to keep a better account of their spending. Also how would we pop money into charity collections?

This is a pretty sad littany of inabilities to adapt to progress. Perhaps we should go back to using beads? What is the difference if one uses a piece of paper, a piece of plasic, or a digital code?
Cash is expensive to use-to create, to count, to transport, to protect. Cards and digital payments are easier than hauling around a wad of cash or a kilo of coins and can easily be tailored for any specific amount rather than creating a pile of tokens to add up to £3.88. It can incorporate bookkeeping at the same time as recording the transaction. Card/digital payments also solve the problem of rural communities not having banks or ATMs. It also makes it easier to track tax liability and prevent a black economy. As for as person-to-person transactions, solutions already exist and could be developed and simplified further. As for those who cannot control their own spending, a debit card only allows one to spend what is available. There is a cost to any system of payment transactions but digital is far less than using cash. Security is an issue but so is getting mugged
Happy spending

B M Fisher says:
6 March 2019

I just want to point out that cashless systems require a robust internet and broadband connections. Some if the rural communities you claim will have their ‘problem solved’ do not have this luxury.

Mike there was a time that I was as equally c**k-sure that I was right as you. But then I spoke to people of different backgrounds and circumstances and as I entered my twenties I grew up and understood that there are always at least two sides to every story. A cashless society always looks more feasible to a city dweller but when you get out in the sticks the connectivity is not so easily available. I don’t think the small-holder down the road is going to be able to take a card for the purchase of half a dozen eggs either.
Equally having observed the problems caused by NatWest and TSB recently I think I’d like to have access to cash to continue to eat.
I think that the banks will need to wait a little longer to try to recoup the money that they so foolishly squandered—do you really want to put all of our commerce in the hands of those so foolish and greedy

Jean says:
6 March 2019

Of course banks want to make it a cashless society, it’s so easy to swipe & not feel the consequences or notice how much little transactions are adding up to – this leads to debt which is where banks make their money! Young people are less likely to be aware as they haven’t had cash to manage for the week / month and banks allow them to go incredibly overdrawn without explaining in laymen’s terms’ the knock on effect or warning immediately they are overdrawn. How many young adults go for a night out and overspend – easier now that they’re encouraged to pay online in the pubs, how is this responsible, they become more intoxicated, less able to think straight, more vulnerable to their environment and may not have cash to get a cab home? At least when they used cash there was a budget to stick to, peers asking would be told – sorry I’m out of cash, so they have more wits about them and make more sensible choices . . . hopefully!

Christina Aitken says:
6 March 2019

There are many people in this world who cannot and who do not know about the technical world and therefore cash is very important. I use my post office to put in cash and get cash, so don’t really miss my bank, so elderly could use the post office for this which will help our local post offices too as posting things is getting less and less I feel, but again, this is a place where we can use it for other companies.

Ann says:
6 March 2019

Not all banks have an arrangement with the Post Office.

Mrs M Redhage says:
6 March 2019

I am disabled & need to pay cash to my cleaner & carers.

Cash is a necessary part of many of my customers lives – the majority pay by cash or cheque and many of these are not what I would call old. I give all my customers the option of paying electronically but many say they do not like this as it is easy to loose track of what they are spending. I personally prefer cash as, with card payments (either contactless or otherwise) it can be awkward hanging on to all the pieces of paper you get as receipts, whereas with cash you may budget easily and once it’s gone, it’s gone. I’m aware that a large part of the economy operates on debt and I would rather not be a part of that having worked myself in to solvency over many years.

Toolans. Russell says:
6 March 2019

Cash machines being discontinued, cheques being charged for in administration. fees.
What about people who have no bank accounts? Everyone is now watching banks paying paid refunds for money fraudulent lying taken. Banks should be held to account for their financial mistakes.
Cash is essential.

The assumption by banks that everyone is computer literate is outrageous. There are hundreds of thousands older people who are not and need access to cash etc. The banks in their greed for larger profits are just ignoring the older generation.

Sheila says:
6 March 2019

This has been planned many years ago, the cashless society, in order that we have less control. Called the New World Order. Cash is not the only thing we will miss!

Sarah Thompson says:
6 March 2019

its governments and banks that want a cashless society.. better for us to have cash

6 March 2019

We must keep cash options available

I am totally against a cashless UK If there is ever a chance that the banking system breaks down we have no access to cash and how would we feel then This would never happen in either Europe or the USA what a silly sheep like race we have become because we are too lazy to say No and think about the real consequences

Alison Keys says:
6 March 2019

I use cash as often as possible, although I do shop online a lot too so I’m no Luddite.
The first thing anyone struggling with debt is told is to cut up their cards & go for cash spending only. It’s much easier to keep to a budget if you can only spend what you have in your purse. I also hesitate to put all my faith in a means of spending (ie cards) which can fail due to power outages (maybe after a storm), can be stopped (card refused – possibly in error or due to equipment failure) and can be tracked. We definitely need to preserve cash as a means of payment & I would not use any establishment which refused to accept it.

The people who need cash most (perhaps elderly rural dwellers without transport) are unable to get access to cash.

John Mellanby says:
6 March 2019

Many small organisations do not have access to card machines. They rely on cash to raise money for raffles etc. These small but very important groups need cash to function.

Penny Simpson says:
6 March 2019

I am just surprised that the Queen & the Treasury have not got involved in this, after all her face in on all the ‘Coin & Notes of the realm’ and it forms part of our culture, & our history in the long run. If we really go cashless, they will all be out of jobs at the Royal Mint! Personally, I like to keep some cash on me for maybe buying a newspaper or magazine that takes my fancy, unexpected parking charges (I have often had very bad luck with meters and/or RingoOnlineParkingPaymentSystems) & for donating into charity boxes, and oh, just sometimes I pay with cash anyway for small items, and for tipping sometimes.

Jason says:
6 March 2019

So, plan A is to put all your eggs in one basket – the cashless society, and plan B? Will I have to barter for goods and services, or rely on credit notes? Do I trust the government or banks to look after me… are you absolutely mad!

The whole cashless thing is about control. Once money is solely “numbers on a screen” then there is no freedom from the whims of the banking cartels. It’s imperative that we protect cash as part of the resistance to the draconian control grid that we are seeing imposed increasingly, day after day. We should all read 1984 😉