As the U.K. moves to a more cashless society, the country’s Access to Cash Review report cautioned that groups of people will be left behind in the movement.
According to the report, as it stands, cash is still a necessity for about 25 million people living in the U.K., with close to half of the people surveyed saying that if cash went away, it would cause problems for them. What’s more, 14 percent of survey respondents said they couldn’t deal without access to cash. The populations at risk in the U.K. include the elderly, those living in rural areas, the homeless, charities and poor people who don’t have access to financial services.
The report also raised concerns about privacy with digital payments, warning they can be traced and that people could tend to make worse financial decisions when using a mobile app or FinTech product. The survey also found that despite the declining number of bank branches and ATMs in the country, cash is still popular, with people using it for the lion’s share of convenience store purchases and charitable donations. “The challenge is that U.K. society is far from homogenous,” the Access to Cash Review report stated. “For some, it’s just a matter of time before we become a cashless society (41 percent believe it’ll happen in their lifetime). But others struggle to see how they could function without cash.”
The review noted that while U.K. residents see the benefits of using digital payments, they also want to use cash because it gives them choice, privacy and peace of mind knowing the currency always works. The report concluded that if the U.K. moves too fast to embrace a cashless society, some parts of the country will face “significant harm” with a “seriously damaging” impact on society. The risks include loss of independence for many, exploitation and abuse of the vulnerable, loss of viability of rural communities and a higher burden placed on the poor through the poverty premium, where people end up paying more if they can’t shop around, buy in bulk or purchase online.
“As cash reduces, this premium could increase as people lose access to the high street, and debt could increase as they lose cash as a mechanism for controlling their budgets,” noted the report.