Are we doomed by paying with cash?

Is paying by cash doomed?

A hard-hitting new report is demanding that government step in with measures to save our doomed cash system.

⚠️ With the PPI Deadline less than a year away, now would be the perfect time to check!

Former FOS chief ombudsman Natalie Ceeney who headed the review that produced the report said: “There are worrying signs that our cash system is falling apart.

Cashless society

“ATM and bank branch closures are just the tip of the iceberg. Underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines. If we sleepwalk into a cashless society, millions will be left behind.

“Ten years ago, six out of every ten transactions were cash. Now it’s three in ten. And in fifteen years’ time, it could be as low as one in ten.”

In 2017 debit card use – especially using contactless payment – overtook the use of cash for the first time ever and the report says that some local communities are now running short of places to obtain cash.

Falling apart

The review says cash use has been falling in the UK in recent years and fear that the system which allows people to use cash is at risk of ‘falling apart’.

It asks the government to step in with a new guarantee that notes and coins can still be used in the future as it believes market forces will not be enough to save cash for as long as people need it.

Change

Suggestions for change include:

  • Local shops offering cash-back to customers, rather than customers relying on ATMs
  • Small businesses given the opportunity to deposit cash in secure lockers or “smart” ATMs, rather than have to make a weekly trip to a bank branch
  • A “radical” change to the infrastructure behind cash, overseen by the Bank of England, to lower the cost and maintain free access for consumers

It also believes that, at the current rate of decline, cash use could end in 2026.

Collapse

The collapse would be driven mainly by retailers and other businesses refusing to take cash owing to the cost of handling it.

The UK’s cash infrastructure costs around £5 billion a year to run. It is mainly paid for by the retail banks and run mostly by commercial operators.

Bank of England chief cashier, Sarah John, said the bank would call together key players in this sector to develop a system that would support lower levels of cash use and encourage innovation ‘to support cash as a viable means of payment for those who want to use it’.

Interim report

In an interim report published last December, the Access To Cash review claimed banknotes and coins are a daily necessity for up to eight million people.

Trouble spots include rural areas where alternative methods of payment are affected by poor broadband or mobile connectivity. Vulnerable sections of the community include people who have physical or mental health problems.

Range of solutions

Responding to the report Eric Leenders, of banking industry trade body UK Finance, said: “The finance industry is using a range of solutions to ensure cash can still be accessed including over the counter withdrawals through 11,500 Post Offices and cash-back from retailers, to investment in ATMs and mobile bank branches to reach more rural communities.

““We will continue to work with the review team, government, and regulators to take forward this important work.””

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Why should I make a PPI claim?

With just six months to go before the PPI deadline on August 29th, millions of potential claims remain to be made with banks setting aside billions of pounds to cover potential pay-outs.

Why should I make a PPI claim?

With just six months to go before the PPI deadline on August 29th, millions of potential claims remain to be made with banks setting aside billions of pounds to cover potential pay-outs.

PPI claims deadline – six months and counting

The PPI claims deadline is now just six months away and if you are one of the millions of people with a PPI policy and you haven’t made a claim for possible mis-selling, your time is running out.

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