Contacless card payment

The viability of rural communities is identified as at risk, along with the independence of the old and disabled

The UK needs to avoid ‘sleepwalking into a cashless society’ that leaves millions of people behind, according to a major review of consumer requirements.

Eight million people, or 17% of the population, say cash is an economic necessity, despite its use halving in the past decade, according to the interim report of the Access to Cash Review.

It is forecast to halve again over the next 10 years, putting millions at risk of exclusion, according to the report, titled ‘Is Britain ready to go cashless?’

The viability of rural communities, where broadband and mobile connectivity can be poor, is identified as at risk, along with the independence of the old and disabled.

Poor people are at risk of paying more because they can’t shop around, while victims of abusive relationships could lose the independence cash gives them, the report says.

Chaired by former Financial Ombudsman Natalie Ceeney, the review is assessing consumer requirements for cash over the next five to 15 years. Evidence has so far been gathered from more than 120 organisations spanning leisure, retail, finance and charity. Policy recommendations are due to be published in the new year.

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“The decline in the use of cash has been dramatic, and with rapid technology development and adoption this trend will continue,” said Ceeney. “But for millions of people in the UK, cash is not a choice, it’s a necessity. If we don’t plan carefully for a world of lower cash - in other words, if we sleepwalk into a cashless society - millions of people will be left behind. As cash use continues to fall, we need to safeguard the use of cash for those who need it, and at the same time work hard to ensure that everyone can participate in this digital economy.”

Andrew Cregan, policy advisor at the British Retail Consortium, said retailers were responding to consumer behaviour by going cashless, while some still chose not to accept cards at all to avoid costs.

“While the majority of retailers accept both cash and card payments, some small businesses have chosen not to accept card payments,” he said. “This is to avoid shops incurring hefty card costs, which surged by over 20% for retailers in 2017, putting upwards pressure on the prices consumers pay at the till.

“Other retailers are going entirely cashless to respond to changing consumer behaviours, with card payments now accounting for more than three quarters of retail sales, though this can make life difficult for the 2.7 million people in the UK who continue to depend almost entirely on cash for their purchases.”