The use of cash in the UK has shrank by a third within a year. As the UK becomes increasingly cashless, it is feared that vulnerable people could be marginalised further and even forgotten unless the use of cash is protected.
In 2017, 61% of all payments were made using cash in the UK. However, in 2018, this figure had slipped to 34%. According to the report ‘Access to Cash,’ speculations have been made that this figure will plummet below 10% within the next 15 years.
However, the report warns that the speed of change will outpace infrastructure and mechanisms to ensure that those on the fringes of society and people in vulnerable positions are catered for.
It is suggested that financial institutions, banks, and government need to put robust processes in place to protect vulnerable people from the effects of a cashless society.
With increased banking closures and cash machines decreasing, the convenience of using and accepting cash within a business is also likely to deteriorate. This will lead to a greater number of businesses becoming cashless which will be more convenient and efficient for the business.
However, the report claims that 17% of the population would be adversely affected by the UK’s reducing cash use, with almost 8 million suffering as a result.
The use of mobile payments has exploded in recent years, with ApplePay now a major source of transactional payments. Where around 25% of the total population use a mobile payment system, fewer than 5% of people over 65-years frequently use this type of payment source.
Similarly, at their peak use in 2016, ATMs were used to take out £280 million. Unfortunately, as fewer people use cash and ATMs continue to decrease, this number has dwindled to less than £230 million in 2018.
2% of the population care for elderly people that overwhelmingly operate using cash; reducing the availability of cash could restrict their ability to finance their lives. 4% of the population also rely on other people to buy things on their behalf; reducing their exposure to cash could impact on this.
Additionally, 2% have mental health issues or are losing capacity and may therefore make digital payments unsafe.
A representative for Age UK, commented: “Cash is a great way to limit your risk. Older people often rely on others to help with shopping, and accept that there is a risk of being short-changed. But if they only give a carer or neighbour a £20 note, then they limit their risk substantially, and it’s easy to see the change so that if there is a problem, you can raise it on the spot.”
A spokesperson for Which?, said: “It’s essential that people’s freedom to pay for goods and services however they choose is protected as we transition to an increasingly digital society. The work of the Review is fundamental to identifying some of the ways this transition can be managed. There are also urgent actions for the Government in this report, and a clear need for strong regulation to protect the interests of millions of people who rely on cash in their day-to-day lives.”
Martin Lewis, money saving expert, 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.”
Nicky Morgan, chair of the Treasury Select Committee, said: “[The time] is now for policymakers to pick up the mantle and bring about the changes required to secure long-term access to cash for those that need it.
“Tinkering around the edges to preserve the status quo will not work.”
Whilst biometrics and digital payment systems will become a lot more prominent in the future, for those with poor broadband connectivity, those that are not tech savvy and those that feel more confident using cash, the exponential explosion and speed of a cashless society will have detrimental and widespread affects unless a robust infrastructure of support is put in place.
