An independent report by the Access to Cash Review has revealed that millions of consumers could face disadvantages in the event of a cashless society.
Last year, debit cards replaced cash as the UK’s most popular payment method and the report, authored by ex-financial ombudsman Natalie Ceeney, reveals that the UK risks ‘sleepwalking’ into becoming a cashless society, despite banknotes and coins being a necessity for eight million people.
Cash use, having halved in the past 10 years, is predicted to halve again in the next decade.
However, cash is still used frequently in some sectors. Around 74% of people use cash to give to charity, and window cleaners are paid with notes and coins in 85% of cases.
Other risks associated with a cashless society highlighted in the report include struggles in rural communities which are afflicted by poor broadband or mobile connectivity, difficulties for some people with physical or mental health problems in using digital cash methods and rising debt levels due to the difficulties of budgeting without cash.
Natalie Ceeney said: ‘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’.
UK Finance, a trade association for the UK banking and financial services sector which represents around 300 UK firms, said that having a range of different payment methods was vital for consumers. Eric Leenders, Managing Director, Personal, of UK Finance commented: “Our own research shows that while cash usage is declining, it will still be the second most common payment method in 10 years’ time. Maintaining access to cash is vital to ensure no customer is left behind. From over-the-counter withdrawals through 11,500 post offices and cashback from retailers, to investment in ATMs and mobile bank branches to reach more rural communities, the finance industry is using a range of solutions.”