Cash is vital to the functioning of our society - we must maintain access to it
A cashless society could see vulnerable individuals and families become more financially excluded and alienated from society, writes Seema Malhotra
According to the Access to Cash Review published in March 2019, ten years ago, six in ten transactions were made in cash. Today, that figure has halved to three in every ten transactions. Similarly, our infrastructure has step by step pivoted away from cash transactions so that even for those who may want or need to pay in cash, the option is too often no longer there.
LINK, the UK’s largest network of ATMs, reported in March 2019 that there are now 4,500 fewer ATMs in their network than at the peak in 2017. There is also a growing trend, especially in metropolitan areas, of retailers and service providers refusing to tender cash payments.
This is a steep decline, which is set to make life harder for millions of citizens who may not have a bank account or credit card or be hesitant to do so. New research estimates that 17% of British people would “not cope” in a cashless society. With this group disproportionately composed of the most vulnerable: the elderly, the disabled, and the poorest, an insufficient policy response is set to see these individuals and families become more financially excluded and alienated from society.
Cash is vital to the functioning of our society: 94% of people carry cash on them, primarily for small transactions and as a backup in case card networks go down, and research from the Post Office found that 44% of small businesses believe the convenience of cash is beneficial to their business.
With these growing trends and the shifts in how financial services are delivered in our communities, it’s increasingly urgent for Parliament to address the challenges in our economy where the use of cash, and the infrastructure that supports access to it, is still clearly needed. These are realities that members of Parliament will recognise from their own casework and which is recognised through research and work undertaken by the Financial Inclusion Commission on which I now sit, the Bank of England and others.
'It is increasingly urgent for Parliament to address the challenges in our economy where the use of cash, and the infrastructure that supports access to it, is still clearly needed.'
The situation regarding access to cash is a challenge that is facing countries across the world. Sweden, for example, has been forced to establish a cross-party committee due to public outcry after hospitals announced they would no longer accept cash. If the Government pioneers and champions a new way of thinking about access to cash, including investment in new infrastructure, it would continue this country’s long history of ground-breaking financial institutions and infrastructure and world-leading economic thinkers.
It is notable that the Bank of England in response to the Access to Cash Review findings stated that many people including vulnerable groups still prefer to use cash and that it is important that everyone has a choice about how they make payments.
However, Parliament must be a continued part of the debate about how the actions that are needed to support cash as a viable means of payment for those who need it are taken forward. That’s why I have secured a debate in Westminster Hall on financial exclusion and the future of access to cash on Tuesday 21 May.
I believe that this is a vital chance to address the reasons why people have not adopted new, cashless technology and discuss the infrastructure model that is needed to ensure that all people in the United Kingdom have access to cash whenever and wherever it is needed and that the Government, and the Treasury in particular, is committed to acting on the growing research, analysis and recommendations carefully.
Seema Malhotra is Labour MP for Feltham and Heston. Her Westminster Hall debate takes place on Tuesday 21 May