The UK Government’s Chancellor of the Exchequer Philip Hammond delivered the first Spring Statement of his term, setting out his plans for the next year. Cash received an unexpected boost from the politician.
He stated that the government needs to figure out “how to encourage cashless and digital payments, while ensuring cash remains available to those who need it”.
However, there was also wariness of cash payments, particularly in their use in tax evasion and money laundering. This may see a shift to more digital platforms.
He said: “We also publish a call for evidence on how online platforms can help their users to pay the right amount of tax.
“We will consult on a new VAT collection mechanism for online sales to ensure that the VAT consumers pay actually reaches the Treasury.”
Oscar Nieboer, chief marketing officer at Paysafe says: “It is encouraging to hear the Chancellor call for a review into the use of cash in today’s Spring Statement.
“A significant part of the Chancellor’s plans revolve around ensuring those who still need to pay with cash are able to do so. Against a backdrop of innovation in digital payment types – some of which have been adopted as their preferred payment type by many UK consumers – the role of cash must not be overlooked.
“Cash remains a lifeline for low-income families and the underserved. According to the Taylor Report, an independent study on work practices commissioned by the UK government, up to £6bn ($8.3bn) worth of wages a year are paid in cash. More importantly, cash is quick and private, which appeals to those who have an issue with ‘Big Corporate’. So, far from dying out, cash will also evolve, merging with new technologies to gain digital relevance.
“We look forward to hearing the outcome of the Chancellor’s exploration in this area. While physical cash may be less prominent than ever before, we must acknowledge its continued importance in the UK.”
Nigel Green, founder of deVere Group, says: “Mr Hammond’s Spring Statement had a decidedly pro-technology tone and this is, I believe, enormously encouraging for the financial sector.
“The sector is currently undergoing, possibly the most profound transformation in modern history, and much of this transformation is being driven by technology, or ‘fintech.’
He continues: “Fintech, which is the use of technology to deliver financial services to consumers, is reshaping and redefining the industry monumentally and in three incredibly positive ways.
“First, it can improve the client experience. More and more, clients demand that all their financial services needs are dealt with online and/or on their mobile devices. They want instant access at any time as well as personal service, and fintech is enabling this to happen.
“Second, it can help society. Fintech is increasing the rate of financial inclusion by providing access to financial services for millions of people who live in remote areas or who might normally not be able to use financial services because of the biases of traditional financial firms. Helping individuals and companies successfully manage, save and invest their money will only result in a better society for us all.
“And third, it can assist companies and industries to diversify, reduce costs and meet regulatory requirements, which will help build long-term relationships and trust as well as contributing to long-term, sustainable economic growth.”