/ 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?

Gwynfor Thomas says:
7 March 2019

Cash is a must for me I am 70 years old live in a rural area have my
milk and bread delivered and pay cash for them I am computer naive and do not trust the system especially when the banks system crash on a regular basis

Geoff Rudge says:
7 March 2019

We definitely need cash for small item purchases. i agree with eeverything that has been said previously.
What would the situation be when you wanted to help one of the homeless on our streets or a busker.
Charity buckets, charity collection tins etc would be gone.

Lynn says:
7 March 2019

Not everyone can afford a card machine and there are many situations where it would not be appropriate either e.g. busking, car boot sales, pocket money for children,gifts, odd job appreciation, admission to local charity events like “Open Gardens” and fetes. etc etc.

What really annoys me is that, in fact, the banks started this decline of cash availability. They say that the trend is towards cashless but if it is, it is only because, they gave us little choice. I do not want to see an increase in the situation where more and more staff are put out of work from the closure of branches. In addition, I only want to be able to access cash from inside a bank because it is safer.

The fact that more IT problems are occurring and there is much more IT fraud must be telling us something, surely?

As other people have observed, cash is still valid for many transactions of ‘everyday’ sizes. Even today a lot of people do not have access to credit or debit cards etc for one reason or another.

Irving Lomon says:
7 March 2019

Paying electonicly should be an option not a demand. Too many groups of people suffer if we go cashless. Too few organisations gain from no cash.

How many times do you see “Card payments accepted for transactions above £5 only” in retail outlets? I have been told this is because the card companies take too long to pay. Whilst this maybe true, are they saying they do not mind waiting for larger amounts to be paid because they make more more profit? If we are to adopt a cashless system it should be possible to make all or any purchases which can be made with cash, be made with the cashless system. Otherwise there are few benefits for the consumer.

As it is, card fraud is the fastest growing method used by criminals to steal money and goods. The losses in terms of their size, outweigh all other types of crime added together. The consumer ends up paying for it regardless of how the banks and financial institutions describe their guarantees and insurances. It is easier to commit anonymous fraud by misusing cashless transactions than it is to physically steal cash or the goods it buys. Also, recovering the proceeds gained and finding the culprits is much more complicated than it is to catch a traditional thief.

The answer we are told, is to make this type of crime much more difficult to commit by increasing the security measures used. Security is all the more relevant when considering a cashless system and yet the basic security methods used by banks and card companies has not changed much since they were started. Although, card crime and online crime have dramatically increased, are the most popular choices criminals use, and are responsible for the biggest losses, security has not kept up with the size and number of cashless transactions carried out. We have seen nothing yet on a scale which “professional” intelligent fraudsters can carry out, but when it inevitably happens, one single crime could destroy the economy of a whole country, whether cashless or not.

It is obviously in the interests of banks and the government to have hard evidence of every transaction ever carried out to prevent tax fraud and to know where all the money is being spent but whether or not this can be achieved by the use of an insecure cashless system which favours them and opens the door to even bigger criminal financial losses is most unlikely.

Rose Simpson says:
7 March 2019

Many clubs are operated by volunteers and people pay small amounts of money each time they go. If everything had to be cashless I think it could deter volunteers as cash is a simple way to operate. It would hit the young and old, parents just hand over a few pounds for subs. Older people going to bridge clubs often pay between £2 – £4. Are the children expected to carry touch and go cards? Cash still has a big role in our society and I don’t think those favouring a cashless life either haven’t thought it through or have a financial motive.

clive says:
7 March 2019

I can not add anymore to previous comments but I will say this who is really in charge of this great country of ours the Banks or Parliament.

Rod says:
7 March 2019

It should be the people who vote, who are in charge of this “ONCE” great country. Parliament who should then apply the wishes of the people, then the banks who hold are money, who should then provide a service to the people.

Where banks close & cashpoints disappear from small suburbs,business’s close as the footfall declines,causing unemployment & bankruptcy.Banks should be made to face up too their public responsibility,whereby no one should be left without a bank,post office or at least a cash pointI. I’m afraid we have been allowed to dictate how we live for their profits.Sorry the time has come for us to stand up too them. They have told us we should all do online banking,a hackers paradise,banks lose millions,but that’s ok it’s covered by Bank closures and ATM removal.The government that saved most of them stands idly by condoning all they do as most are in cahoots with them.Time for a radical rethink.

John Golfer says:
7 March 2019

The local tourist economy would be hard hit by absence of cash. Farm gate produce sales, car parking in small fields near remote beaches, and other vital supplementary income for low income families giving catering, cleaning or luggage assistance. This on top of all the charity and old age access issues raised by others,

Anthony Brookes says:
7 March 2019

There are people in society that don’t have the access to a computer. Therefore they can’t function in a cashless society. There are those, like me although computer literate to a certain degree can’t remember the passwords etc to function in a cashless society.
What about people who have memory problems, I am a stroke survivor and my memory was nothing to write home about before the stroke suffered through the having a stroke. In the case of my father it was even worse the stroke virtually zapped his short term memory.

Antony, I’ve met folk who do not have regular computer access and thus don’t use internet banking, but who did still have bank cards.

Folk like that should be able to cope with things like cashless buses and such like. (Indeed on buses, paying by contactless card seems to be much easier than paying by cash.)

For small amounts, contactless cards do away with the hassle of having to remember PIN numbers.

For larger amounts, card payments will still need be authorised by PIN numbers (or other suitable means).

In general, think many people struggle to remember passwords, but, so long as systems are designed to allow for that, most people will be able to get by on the internet.

For many practical purposes, it is now highly desirable to have access to internet facilities, even if you don’t want to shop or bank online. Last week, I helped someone with a online application for a benefits loan. In that example an email address and a phone number were not needed, only NI number, d.o.b. and home address.

Liz Templar says:
7 March 2019

I’m so afraid of forgetting my password that I don’t use one on my computer and I live in constant dread of the Internet being ‘down’ or my PC blowing a gasket and not being able to order and pay for my groceries. If we went totally cashless it could only work if the Internet was 100% reliable.

Rolo Gale says:
7 March 2019

Paying for parking using a mobile phone is useless to me, we do not even have a mobile signal where we live so don’t use one.

PeterMcdermott says:
7 March 2019

My grandchildren are 8 & 12 ,how do I give them their pocket money,
I give them a £5 note each or on festive days a £10 note.For Birthday s
I give them a £25 cheque each.
So cash & cheques are under threats,what would I do then???

Peter, these days, even children that age can have bank accounts and contactless debit cards.

Bob Watkins says:
7 March 2019

As a disabled full time wheelchair user, I carry cash to pay for little shop purchases, pay the daily domestic care attendant, window cleaner, gardener etc, etc. Cash points are essential to me as there is no wheelchair access to my bank, and indeed very few other banks here in Cornwall. If all the ATM’s disappear, how will I manage?

C. Colwell says:
7 March 2019

Cash has always been, and continues to be, the safest and most convenient way to pay for goods. We can all be sure that in dealing with cash, what you see is what you’ve got. Handing over a card or paying over the phone or internet, is worse than handing a stranger a wallet full of cash. At least if it was the wallet, you know they can’t have more than it contains, whereas electronically you could lose your life savings. One digit entered incorrectly in on-line banking can result in your money going to the wrong person, while scams and system problems are fraught with dangers that don’t exist when we deal with cash and cheques. Cash transactions are simpler and safer than cards. No contest!

That said, I seem to recall that cheques can bounce and bank notes can be forged…

Apparently bank notes used to be issued in books and when you wanted to use one you cut it out of the book using a curvy cut; the recipient then matched to note to the book to ensure it came from a genuine source. I wasn’t clear, though, how that stopped you forging a whole book of notes. I don’t think it’ll catch on.

Is that where the term ‘notebook’ came from. 🙂

Frank Hawley says:
7 March 2019

I rarely use cash but when I do it is because there is no alternative. I can see that it will be very difficult for many especially those who find it difficult pay in any other way. I notice when I am at stores checkouts so many people pay by cash.

Johann says:
7 March 2019

I think all Bank account must be protected with 100%, because when come 5 G nobody can tracking your lost money. I think government need punish Bank customer money lost., I think all world need one single digital currency same name , all country, No visa, No MasterCard no cash card people can make number pay dependendent what you do for your Country…this be your incomes and your pay wage. No charge transaction currency or use ATM, you write number and take money number. Same do with religion, NO more religion because make people for last 7000 year always fight, if you wish practise religion ( country, people you NOT laut kill, hurt some or Country have punish money go out from Budget, no money).
Transaction all hand scanner or DNA every place, pub, street , sinema, shop, every corner, PC, Tablet, Mobile Phones. But,, security must be very high for Bank if 3 time money go Bank closure and money all customer transfer ( number/money) to other Bank. Thank you.
Johann from Milton Keynes.

Ian Southern says:
7 March 2019

I think a cashless society is inevitable but it should be led by society not business. The principal motor of business is the bottom line, maximising profitability. As long as they are allowed to pass IT failures (security breaches, electronic theft etc) on to the consumer, business will continue on their unregulated path.

It is only when consumers rebel will business broaden their remit and include the impact on society of their actions. It is clear, we are far from ready to dispense with cash but the march is on, and unless government wakes up, the bottom line will triumph and most of us will be left grovelling in the mud while an elite few party on. Wake up government: you are OUR servants NOT business’s. Lead and regulate.

Derek says:
7 March 2019

Whilst I totally agree with all of the comments regarding shopping etc I would just like to add that I know several people who pretty much shop totally with a card but still need a coin to get a trolley to shop with. Also will every laundrette have card readers for washers and dryers? Will every hand car wash take cards? What about those who sell The Big Issue. Let people who want to be mainly cashless be mainly cashles and leave the rest of us alone!

Liz Templar says:
7 March 2019

Hear hear!

Robert says:
7 March 2019

Why do we need this draconian imposition entitled the “çashless society” – whilst I understand the need to manage fraud, money laundering, keeping tabs on people through the electronic money chain etc. the cashless society is purely for the convenience of banks and government, not for the people.

We elect a government to act and make decisions on behalf of the people, the government are unwilling to get involved as they are embroiled in a conflict of interest – the cashless society will make money management a simple electronic exercise with little or no requirement for personal intervention on the government and the banks part and will provide a custody chain.

It is the people not just of the UK but the majority of the world who need this ‘ages old” working method of financial transaction and it will be the same people (the low hanging fruit) who will be ignored by those who have been elected to make decisions on their behalf.

Finally, all software currently is inherently flawed as it produced by fallible humans – we’re really good at making mistakes!

So until an alternative solution that works for the majority of the people of the UK and the World, both the government and the banks should work harder to improve the current cash society or leave what we have
well alone.

Just my morning rant on how the institutions of our society are reshaping our world to suit themselves at the expense of those that keep it all going – The people like me and you 🙂