As the pandemic rapidly accelerates the decline in cash use and acceptance, our guest, Paul Maynard MP, sets out why he thinks access to cash should be seen as a right.
This is a guest post by Paul Maynard MP. All views expressed are Paul’s own and not necessarily shared by Which?.
It’s clear that coronavirus has changed the way we live our lives in so many ways. More cycling, fewer foreign holidays, more home working, fewer office blocks.
Some existing trends have been accelerated and may become irreversible. One of these is our use of cash.
How often have you seen signs now saying ‘card only’ or ‘card preferred’? You might think nothing of it, flash your contactless card, and maybe reflect on how long your freshly minted plastic £20 notes are staying in your wallet or purse unused.
But the ‘dash from cash’ does have risks. Not everyone is either willing or has the confidence to abandon cash.
Many who have debt problems, for example, manage them through a ‘jam jar’ technique which seems them apportioning cash to differing priorities – very hard to do when all you have is a card.
Turning cashless without noticing
We know from industry statistics that the amount of cash being taken out from cash machines has fallen off a cliff since the start of lockdown – we are turning cashless without having either noticed or really discussed it. And it does raise issues.
So far the debate around cash has mostly been around protecting ATM access, and filling in the gaps in the ‘free to use’ network. But what is the point of preserving access to cash if there is nowhere to spend it?
The government has set up various institutional bodies to try to reduce the costs of the hidden cash infrastructure that distributes notes and coins.
This may encourage some businesses to keep taking cash. But as cash use diminishes, the costs of maintaining the hidden wiring of cash will keep on going up, so it isn’t a long term solution.
I suspect we have to accept that the days of cash are greatly numbered. We won’t be having anguished debates about who appears on a bank note, but rather whether we even have bank notes.
But we can try to slow the process down in order to give us time to prepare and cater for the vulnerable.
Slowing the process
This involves making clear the cash is no more risky in terms of passing on the virus as a method of payment. Over-cautiousness in this regard is one of the main drivers of retailer reluctance to accept cash.
The second key requirement is to set up a body a bit like Digital UK which managed the transition from analogue to digital TV.
It is perfectly possible to manage this transition – but it needs a guiding hand that can knit all the different interest groups together, and work with both providers of the cash infrastructure, but also those charities who work on debt advice or support the elderly.
There are many questions we have yet to grapple with. Should paying with cash up to £100 become an enforceable legal right – as happens in Denmark?
Will we also need a short term requirement for shops to continue to accept cash as the primary way to protect acceptance of cash whilst we manage the transition?
We need to see access as a right, and regard cash as a critical piece of our infrastructure, no different from broadband or railways. Few have talked in the public sphere so far about the future of money – but we need to start right now.
This was a guest post by Paul Maynard MP. All views expressed were Paul’s own and not necessarily shared by Which?.
The coronavirus pandemic has rapidly accelerated the decline in cash use, putting immense pressure on the UK’s cash infrastructure and pushing the system close to collapse.
What’s more, an increasing number of businesses are refusing or discouraging the use of cash in favour of contactless payment methods.
While Which? welcomed the Chancellor’s commitment to introduce legislation protecting access to cash in the March 2020 Budget, the pandemic has dramatically shortened the time frame for intervention. Unless legislation is introduced urgently, the ability to access and spend cash could be permanently lost for many consumers.
Visit our Freedom to Pay campaign page to find out more about our efforts to protect cash, and to download our recent consumer handbook on ‘Banking in the New Normal’, which provides information on how banks are continuing to help customers access cash, banking services and online support during the crisis.
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