‘We wouldn’t survive if our beloved cash disappeared’

The drive towards cashlessness will have a huge impact on community groups and independent shops, write Adam Williams and Will Kirkman

Small businesses, community organisations and charities have come together to back Telegraph Money’s Keep Cash campaign. Last week, this newspaper launched a major drive to highlight the urgent need to protect our physical currency, in light of retailers, restaurants and other businesses shunning cash in favour of cards and digital payments.

More than 20 high- street names, including M&S and John Lewis, have backed the campaign. Now smaller clothing shops, cafés, independent department stores, gift shops and boutiques have also joined the pledge to accept notes and coins indefinitely.

Keep Cash was praised in Parliament this week by Conservative MP David Johnston. He called on the Government to ensure citizens will “always be able” to access and spend cash. In response, Leader of the House of Commons Jacob Rees Mogg expressed his support and said work was under way to protect physical currency.

Abandoning cash can have severe cost implications for small businesses. While large stores can absorb the cost of card machine payments, independent shops have been forced to shoulder higher fees. They must pay upfront and monthly fees for card readers, plus fees of up to 3.5pc for each transaction. These are ultimately passed to the consumer in the form of higher prices. Retailers, and therefore customers, would be vulnerable to even higher charges if cash disappeared.

It is not just small businesses that would struggle if cash was killed. Charities and community groups would be in jeopardy. Kathy Benn MBE, of Cheshire Community Action, a rural charity, said thousands of organisations relied on cash. “A lot of our clubs run raffles and other fundraising events where cash is the only means to take part,” she said. “Our members do not have bank accounts or smartphones. They use cash every day.”

Many people presume that, as banknotes and coins are legal tender, shops must accept them. However, legal tender refers only to the legal settlement of debts. Businesses are within their rights to reject any form of payment, even if it loses them customers.

But Andrew Goodacre of the British Independent Retailers Association, a trade body, said: “We must acknowledge many people do not want to, or cannot, access cards for payment.”

Banks have been accused of making it difficult for businesses to use cash, as reduced opening hours have hampered their ability to deposit money at the end of the day’s trading. Despite Covid restrictions being eased, many banks still operate reduced hours. This month TSB announced plans to close all of its over-the- counter services in branches permanently from 4pm.

Cashlessness can have a devastating impact on rural economies. Phone and internet signal is often poor, which can make digital payments difficult. Mrs Benn said the loss of cash would be the latest blow to rural life, following the axing of local bus services and post office closures. A report published yesterday by the City watchdog, the Financial Conduct Authority, showed almost a quarter of the rural population are now more than 2km (1.2 miles) from their nearest free source of cash.