The cashless society is now on the cards

Banks and the taxman would love to do away with cash – but the digital economy isn’t for everyone

The inexorable onward march towards the much-lauded digital economy of the future has reached its next stage. New figures released today show that last year for the first time, more than half of all purchases were made by card.

Banks, and the Government, are desperate for us to go cashless. It’s much easier and cheaper for them if we do all of our spending and earning neatly, on the internet, without any of the fuss, bother and expense that cash produces. Bank branches and ATMS are costly and difficult to run. You have to employ security and staff and pay business rates and rent. Wouldn’t it be easier if everything was cleanly done online so there was a nice easy trail to follow? Apparently consumers are coming around too.

As a millennial I’m afraid I am right in the middle of this. My phone holds more financial information than I care to think about. I bank by app and pay by Apple Pay. I can’t remember the last time I went into a bank branch and I can go weeks without using a cashpoint. It’s all very convenient.

But there are downsides too. I have done away with my Oyster card, meaning not only TFL but my card provider know exactly where I am on the Tube network. And I can’t be the only one who is more than a little concerned about the level of information Apple now holds about me – including my bank details. Yes, security is apparently tight. But scams are worryingly common, and banks are often all too quick to lay blame at the door of the consumer.

Moreover, while I am more than happy to manage my money by app, I am conscious that it’s not so easy for those who did not grow up in an internet age. Plenty of people simply find it easier, less stressful and more convenient to pay and earn in cash. Often they are the less well-off and older people: those for whom appbased banking is a complication, not a shortcut. It’s easier to budget when you have a physical bundle, and easier to avoid the exhortations of businesses to spend more than you can afford.

There’s also the fact that going cashless, which is simple in London, becomes harder if you live somewhere with poor phone reception. Anyone who has waited patiently for a recalcitrant card machine to accept their debit card so they can pay for a coffee will know that the technology is nowhere near the stage of being reliable for all transactions.

Cash even allows us a little freedom to go off-grid, to spend and earn away from the prying eyes of government, banks and whoever else may be watching. The self-employed have long had this luxury. Trading convenience for privacy, many still earn and spend in cash.

But now the Government has been advised to end this little corner of un-digitised economy, too. The long-awaited Taylor Review, released yesterday, says that it’s time gardeners, window cleaners and child minders set up contactless terminals and stopped accepting old-fashioned notes in return for their labour.

Forcing babysitters and gardeners to get payment terminals would be a time-consuming, stressful ordeal for all involved – and all in aid of making sure HMRC can ensure it is mopping up every last penny of tax.

Concerns have already been raised over the Government’s drive to make tax returns digital: that it would disadvantage those who did not use the internet, and lead to a lot more investigations with little extra tax take to show for it. That plan has been stalled by the election, but it seems clear that the march away from cash will still continue.

Imagine a future in which doting grandparents will no longer be able to slip a grandchild a tenner on their birthday; all gifts will have to be made in an Hmrc-approved manner, so the taxman can check that their inheritance tax bill is right. For most people who do it, earning cash is not a shady, underhand way to avoid tax, and few of them are stashing wads of notes under the mattress.

Tinfoil-hat conspiracy theorists would have it that the banking system is a ploy to harvest consumers’ money to line the pockets of a shady establishment. That’s not the issue, and reducing tax avoidance is a laudable aim that all will support.

But we should be mindful not to stigmatise cash. It has an important place in a society where the digital economy is still far from perfect.