There’s big money in forcing us to go cashless

Faced with the might of the payments industry, the Government should protect our right to cash

How bizarre that we should spend so much energy arguing over commas on 50p pieces and who should be on our banknotes – and so little time worrying whether we can actually get hold of cash when we want it. A study by Which? magazine reveals that 8,700 free-to-use cash machines have disappeared in the past two years. In some small towns residents don’t even have access to a rip-off, £2-a-go machine. Those in Naseby, Northamptonshire, have to take a 20-minute bus ride to their nearest machine; those in Harlech, North Wales, a 25-minute train ride.

For a government committed to “levelling up” the regions beyond London, this ought to sound alarms. Quite rightly, access to high-speed broadband is now a legal right, wherever you live in the country, under a universal service obligation on telecoms companies. But cash machines? Forget it. The banking and payments industry has been allowed to chip away at our right to use cash in the name of generating huge profits for itself – and the Government is doing nothing to dissuade it.

David Cameron even toyed with the idea of announcing, in his 2015 Conservative conference speech, the total abolition of cash by 2020 – only to be talked out of it by George Osborne who thought it might not be the greatest vote-winner. Too right, it wouldn’t.

It might come as a surprise to metropolitan-based policymakers who spend much of their lives swiping at smartphones in urban Wi-fi zones, but there is a large section of the British population that still relies heavily on cash. The fact that there are plenty of tech-savvy silver surfers shouldn’t blind us to the fact that for a significant number of elderly people the online world remains a deeply confusing place. Only 40 per cent of the over65s, according to the ONS, have used a smartphone in the past three months. One in 13 Britons have never used the internet. The young graduates who dream up these systems have grown up with technology and find it simple to master some payment app on their phones; what they seem unable to do is put themselves in the shoes of somebody who has spent their life withdrawing cash from a teller and was rather happy with that system.

True, it is easier to use a contactless card – unless, that is, you are one of the 1.2 million Britons who have no bank account. It might seem odd to most people, but there are some obvious factors behind why people struggle to open accounts: if they have no fixed abode, and are unable to provide such things as utility bills, for example. The contempt shown by some government ministers towards this group of people is astonishing. Pushing the coalition’s Digital by Default strategy in 2014, the then Cabinet office minister Francis Maude referred to people not online as “refuseniks” who might be offered a one-off lesson in using the internet but who would otherwise be frozen out of using public services.

One of the arguments frequently advanced for a cashless economy is that it will supposedly cut crime. It doesn’t stack up: the move to online banking and commerce has led to an explosion in fraud, with victims duped into sending large sums to criminals’ bank accounts from which miserably little seems to be recovered, in spite of it being theoretically traceable. Depriving people of the right to use cash is putting them more at risk of crime, not less.

Contactless cards, too, present new opportunities for crime. At least if you are mugged for the £20 in your wallet that is as much as you can lose. Not so with a card which, if stolen, can be used over and over again to draw cash direct from your account. The EU – which deserves credit where it is due – has at least introduced rules demanding checks on a customer’s identity whenever their cumulative spend on a contactless card reaches €100 (£85). The move has produced predictable bleating from the payments industry – with one company preposterously claiming that it would cost retailers £50billion a year as shoppers abandoned purchases because they hadn’t got the time to key in a PIN.

Of course, cashless forms of payment are a good thing when consumers are making a free choice to use them. But there is only one reason why lobbyists have been trying to push for a cashless economy: because cash constitutes an inconvenient, free form of competition for the financial technology (fintech) industry. A report by the US Department for Commerce gave the game away. In 2016 alone investors poured $19billion into fintech in the expectation that going cashless could, by 2023, double the $1trillion (£800billion) in fees globally creamed off by the banking and payments industry.

That’s why you can’t find a cashpoint, or if you can it wants to sting you £2 a time. Drive cash out of the economy and it will be a feast day for some. It is time the Government spotted what is happening and put out a universal service obligation on the banks to provide us with free access to our cash.

‘The War Against Cash’ by Ross Clark is published by Harriman House follow Ross Clark on Twitter @Rossjournoclark; read more at telegraph.co.uk/opinion