Is the UK ready to go cashless?
Using cash to make a transaction in the UK is dramatically declining
This morning the Telegraph voiced concerns that cash is going extinct, and that we must act now before it is too late. NR talked to UK Finance to understand the severity of the situation, and find out if the UK is ready to go cashless.
According to a recent survey, Britain is becoming more and more dependent on digital payments. Just a decade ago, six out of ten transactions were cash. But today, only three in ten transactions are cash. Researchers predict that by 2035, it could be as low as one in ten.
In July 2018, UK Finance launched the Access to Cash Review to look at the future of cash access across the UK.
The review was conducted over a series of six months, with research into trends in payment methods, international comparisons, consumer needs and behaviour, and the financial and economic drivers of the cash economy. Through workshops across the region and a survey of 2,000 nationally representative UK consumers, researchers found that although the use of cash is rapidly declining, Britain is not yet ready to go cashless.
New technology is making payments easier and faster than ever before – making more traditional payment methods a thing of the past. The growth in debit card payments has been a major key factor, reigning as the UK’s most frequent payment in recent years. The introduction of contactless payment dramatically drove this growth forward, with nearly 119m contactless cards being issued by the end of 2017.
However, cash is still an economic necessity for around 25m people in the UK.
Millions of people are still using cash for their day-to-day transactions, including charitable giving, paying cleaners, and taxi fares. Studies also showed that while over half of adults made digital payments, the majority of these adults are under age 40, whilst those over 65 are more likely to use cash.
The shift to digital payment also poses threat to those living outside of urban areas where mobile and broadband connectivity are lacking.
Moreover, consumer groups worry about the closure of rural ATMs and brank branches. The review found that consumers use ATMs to take out over 90% of their cash, but with the fall in ATM volumes as a result of reduced cash dependency, some individuals who are still reliant on cash are worried that ATMs could be removed in their area.
In the report’s conclusion, Chair of UK Finance Natalie Ceeney voiced concern that if the UK moves too fast towards “a cashless society” without a plan, millions of people could face significant harm.
Ms Ceeney said: “The decline in the use of cash has been dramatic, and with rapid technology development and adoption this trend will continue.
But for millions of people in the UK, cash is not a choice, it’s a necessity. If we sleepwalk into a cashless society – millions of people will be left behind.”
In order for these risk to be addressed, UK Finance suggest that a reliable and effective cash infrastructure be put in place for those who need and choose to use cash, while developing digital solutions that work for everyone.
As Britain moves towards a more cashless society, it is crucial that no one gets left behind.
