Cash advice
From the speedy slap of a contactless card to the convenience of online payments, the switch to cashfree consumerism has surged – and if it continues, we could become fully cashless by 2026…
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WHO WILL BE AFFECTED MOST? Consumers with cognitive or physical disabilities: they may find handling cash easier than remembering a PIN or reading a screen. Many have carers who shop for them, so rely on cash to track spending. Those with financial difficulty: 78 per cent of households with a lower income rely exclusively on cash*. Hospitality’s front-of-house staff: as there’s no legal requirement for businesses to pass a service charge on to its employees, they may not get their tips. The homeless: with less cash and many food joints rejecting cash payments, the homeless miss out on meals and money for hostels. 2
HOW HAS CORONAVIRUS AFFECTED THE USE OF CASH? New research by A2z shows that Covid-19 has led to a 60 per cent fall in withdrawals from cash machines. According to GoCompare, a third of UK adults are avoiding cash to reduce contact, abide with social distancing and prevent spreading Coronavirus. But the Bank of England and WHO have stressed that cash doesn’t pose any greater risk of carrying Covid than any other items. 3
PROS OF A CASHLESS SOCIETY
It’s cheaper – Britain’s cash infrastructure costs around £5 billion a year to run – and its consumers are bearing the weight. A cashless society is greener, reduces tax avoidance and crime – less chance of over-the-counter robberies and break-ins. Cash-free payments are speedier, more convenient and promote less contact – so fewer queues. It’s also easier to track missing money with every transaction recorded on a bank statement. Cash also won’t improve your credit score. 4
CONS OF A CASHLESS SOCIETY Clicking, swiping and tapping can create bad spending habits, as people become less aware of their daily outgoings. The lack of physically holding and counting cash makes it harder to budget too. A cashless society is less personable – whether it’s interaction with a cashier, or money in a birthday card, there’s an emotional and community value attached to cash. IT failure and cyber-attacks make digital finance vulnerable to system failures and online hackers. It also raises the risk of financial abuse, particularly if you struggle with technology. 5
WHAT
DO THE EXPERTS SAY? Natalie Ceeney, chair of Innovative Finance and CBE of the Access to Cash Review says: ‘For millions of people in the UK, cash is not a choice, it’s a necessity. The risks of excluding many people from being able to pay in cash are significant, including risks to the loss of personal independence, and increased risk of financial abuse and debt.’