Are we actually going to end up as a cashless society?

October 18, 2019 6:30:37 AM

Talk around cash – and concerns that it’s growing harder to access physical money – has been getting louder.

Consumer campaigners have been highlighting fears about people’s continued ability to obtain notes and coins – while industry bodies have been explaining how they’re tackling the issue.

So, should you be worried? Here’s a look at what the access to cash debate is all about…

  • 2008, 60%
  • 2018, 28%

How has cash use changed?

Many people now use cash less often – alongside the rise of mobile banking and contactless payments.

In 2008, 60% of payments were made in cash, but by 2018, this had shrunk to 28%. By 2028, it’s predicted just 9% of payments will be in cash, according to trade association UK Finance.

Last year, 5.4 million consumers rarely used cash – making one or no cash payments per month. But many rely heavily on cash. Some 1.9 million consumers mainly used cash for their spending last year.

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What concerns have been raised?

Bank branch and cashpoint closures have sparked fears people are being pushed towards a “cashless” society.

Consumer group Which? found some people face a long bus journey or even need to hop on a ferry to find their nearest free-to-use ATM.

Recent reductions to the fees that card issuers pay to ATM operators have fuelled concerns more machines could close. Meanwhile, around a third of the UK’s bank branches have shut within the past five years alone, according to Which?

Martyn James, spokesman for consumer help website, says: “Worryingly, the evidence shows that people in rural communities are losing banking and ATM services, leaving them stuck with limited options. Often, this is where poor access to Wi-Fi and broadband occur.”

What’s the Post Office’s role?

To help support cash access, banks have arranged for everyday banking services to be available through the Post Office, which has more than 11,500 branches.

Last year, it handled some 130 million transactions on behalf of UK banks. A new three-year agreement has just been reached, so customers can continue to have this service.

Controversially, Barclays has decided to end over-the-counter cash withdrawals from Post Office branches for its customers next year, although its other existing services will still be available. Barclays has also pledged not to close branches in remote areas or where it is the last bank in town, for the next two years.

Natalie Ceeney, independent chair of the Access to Cash Review, says the provision of banking services through the Post Office has helped to underpin the cash network – but she fears Barclays’ decision “could be the thin end of the wedge”.

She says: “While many of us can survive in a cashless society, there are eight million adults who would seriously struggle.”

What’s the industry doing?

A new £1 million fund has been launched – meaning consumers can request a free ATM directly from cash machine network Link, when it’s needed. The Community Access to Cash Delivery Fund enables local communities to apply through their MP, local council, or request help directly.

John Howells, chief executive of Link says: “Link data shows that ATM usage is declining quickly. In fact, it’s down 10% year-on-year. But cash remains vital for communities and the high street.”

He continues: “We’re already beginning to commission new ATMs across the UK. We want to hear from more communities who have poor access to cash. If it meets our criteria, Link will install a free-to-use ATM.”

Trade association UK Finance has another scheme – the Community Access to Cash Initiative – to help fill cash gaps. It will help to set up solutions, such as cashback initiatives, where a new ATM isn’t appropriate or required.

A spokesman for UK Finance says: “The industry is committed to ensuring access to cash remains free and widely accessible for those that continue to need it.”

So who’s keeping an eye on payments?

The Payments Systems Regulator (PSR) says: “Everyone should have a good choice of how to make payments in ways that work well for them, and cash still has an important role to play.

“The PSR is focusing on key areas where we can help make a difference. Last year, we used our powers and gave specific direction to ensure Link met its commitment to protect the geographic spread of free-to-use ATMs.

“We have started a review of this direction, to make sure it does all it can to fulfil its commitment to maintain this broad spread.”

What can I do if I’m concerned about a lack of cash in my area?

As well as contacting industry schemes to see if you can improve cash access, is encouraging people who are worried about losing their free cashpoint to complain at

And if your bank has just closed your local branch, you could vote with your feet – and switch to one whose doors are open.