Campaigners have called on the British government to pass new laws to “ensure the shift to digital doesn’t leave millions behind or put our economy at risk”.
Groups concerned about financial exclusion in UK have called for Chancellor Rishi Sunak to include measures to protect access to physical money as part of the March budget.
They warn that the UK’s cash system has edged closer to collapse.
According to the Financial Inclusion Commission campaigners, nearly two million people in Britain don’t have a bank account, meaning they need notes and coins to pay their way.
There were 11 billion cash payments in the UK in 2018, but they are forecast to fall to 3.8 billion in 2028, accounting for fewer than one in ten (9%) of all payments.
The Financial Inclusion Commission is an independent campaigning body made up of parliamentarians and experts, whose aim is to promote financial inclusion on the public policy agenda.
Rules forcing banks to provide “suitable access” to cash for customers
Another group that is demanding government action is made up of the authors of Access to Cash Review.
The group, which is led by the former Financial Ombudsman Service boss Natalie Ceeney, wants parliament to hand extra powers to regulators and introduce rules forcing banks to provide suitable access to cash for customers.
“The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy,” Ceeney said. “Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.”
Access to Cash Review was established to consider consumer requirements for cash over the next five to fifteen year.
Members of the Review are calling for extra safeguards to support the UK’s cash infrastructure, which has come under severe strain in the 12 months since the independent body published its original report last March.
In that report, they warned that more than 8 million UK adults would struggle to cope in a cashless society, with a significant number still relying on cash for day-to-day transactions.
Shops going cashless… ATMs, bank branches closing
In the past year alone, 13% of all free-to-use ATMs in the UK have closed and the number of charging ATMs has jumped from 7% to 25%, costing consumers £29m more in fees.
More and more shops are going cashless, as bank branch closures make it harder for retailers to deposit their cash.
Major retailers such as Tesco are piloting stores that only accept cards and digital payments. British Gas announced last year that customers would no longer be able to pay their bills in cash at PayPoint terminals in shops.
“This is already starting to exclude people,” the Access to Cash panel said.
Consumers are relying more heavily on the Post Office network for withdrawals because of bank branch closures. But that service has also come under threat.