It is no surprise that cash is now in danger of going the way of the dodo
Maybe it’s a little bit of an age thing, but I still love my cash – nothing beats a wallet or purse full of crisp £10 notes and shiny 50p coins. It all feels so tangible and when I’ve spent it all, it acts as a form of financial check. Can I afford to get more out or should I rein things in for a while?
Yet, like most people, recent coronavirus-related events have rapidly culled my use of cash. Visits to the local cash machine in Wokingham, Berkshire have been few and far between. When I’ve used one of the machines, it has usually been to provide cash so that I can buy myself some fruit from the Saturday market (a cash only store) and a moist Eccles cake (or two) from the baker (again, cash only) to enjoy while reading the weekend newspapers.
But apart from this welcome Saturday outing – for a long while now, the highlight of my week - I’ve gone cashless.
More than ever, I’ve been using my contactless card to buy bits and pieces from the local Waitrose store and to purchase my daily stack of newspapers (journalists do like to read). It’s a form of payment that was given a boost by the April increase in the transaction limit from £30 to £45 and I imagine that as the economy returns to a semblance of normality, it will be the way most people pay for goods and services.
A result of many businesses and retailers (what is left of them) choosing to go card-only – and consumers being more fearful of using cash as a result of lingering health fears.
Mobile phone based ‘wallets’ – allowing you to make payments with your phone – will also increase in popularity. For the record, I have a Starling card stored on my phone that until lockdown I used to use every morning on the way into work to purchase my regular 99p black filter coffee from Pret A Manger, located just yards from my office. That habit, I am sure, will be revived as I return to office-bound work.
Given all this, it is no surprise that cash is now in danger of going the way of the dodo. A decade ago, cash accounted for six in every 10 payments. Today, it stands at around two and I wouldn’t be surprised if it falls further as access to cash is restricted.
Free-to-use cash machines are disappearing at an alarming rate (one of NatWest’s two cash machines in Wokingham has been removed and the hole boarded up) as are high street bank branches. These trends will not go away – indeed, they will gain a new momentum as the economy shrinks and banks look to cut their operating costs.
So, should we all now stand back and let the country follow in the footsteps of others such as Sweden and move inexorably towards a cashless society? I don’t think so. Cash is still an essential payment tool for many people, small businesses and charities.
It is cherished by the elderly, local markets like the one in Wokingham and many independent retail businesses while for many financially challenged people it’s the way they conduct their financial lives. Without cash, they would very much be financially excluded.
Thankfully, there are some people in high places who still believe cash still has a vital role to play in the workings of a dynamic economy. Step forward Natalie Ceeney, the author last year of a key report on access to cash which concluded that some eight million UK adults would struggle to cope in a cashless society. Ceeney’s view is simple: access to cash must be protected.
It’s a view that the Government seems to agree with. In March, it promised to introduce legislation to support ready access to cash, but these plans were then understandably pushed to one side as the economy went into lockdown. It is important that they are not now abandoned.
Thankfully, Ceeney refuses to lie down quietly. As part of a scheme funded by the banking industry, she has just authorised a number of ‘pilot’ projects up and down the country. They are designed to test different ways of making cash available in communities where it is seen to be vital to their long-term survival.
Everything from the simple introduction of a free-to-use ATM in a community currently without one, through to the setting up of a ‘shared’ bank branch that could be used by customers of all banks. As a result of greater customer usage and the big banks sharing the running costs, such all-in-one branches could pay their own way – while breathing new life into a previously bankless community.
If any of these pilots are seen to work well, it is Ceeney’s wish that the ‘cash’ ideas behind them are then rolled out on a national scale – with the blessing of the banking industry and the Government.
Yes, we live in an era of rampant ‘digitalisation’, but cash is a vital cog in the wheel that drives our economy forward. It must be preserved. My wallet couldn’t live without it.