Thursday 7 March 2019 8:58 am

DEBATE: In light of this week’s Access to Cash Review, is the UK ready to go cashless?

In light of this week’s Access to Cash Review, is the UK ready to go cashless?

Abhijit Deb, head of banking and financial services (UK&I) at Cognizant, says YES.

From contactless card technology to smartphone payments, we have seen innovations draw much of the public away from cash to new methods. Convenience is obviously a big factor, but digital payments’ ability to tackle electronic fraud with improved identity verification is also a massive driver.

Regulatory changes, such as the European IFR regulation, should lower the barrier for smaller merchants looking to go cashless, held back in the past by setup costs and card fees. With acquirers also working to bring them into the cashless fold, we are likely to see more cash-reliant shoppers become exposed to digital payments.

Before the UK goes completely cashless, the digital payments ecosystem must be enhanced to make it a universally viable option, so consumers know that they don’t have to worry about issues like payment rejections or electronic fraud. But the UK is moving towards a cashless society, and banks are rightly investing in giving customers access to a range of payment options that do not rely on cash.

Natalie Ceeney, independent chair of the Access to Cash Review, says NO.

The decline of cash is irrefutable. Today in Britain we only use cash for three in every 10 transactions, down from six in 10 a decade ago. The shift to digital means that cash is forecast to fall as low as one in 10 transactions within the next 15 years.

Yet the UK is not ready to go cashless. Digital does not work for everyone – at least not yet. For eight million people (17 per cent of the UK adult population) cash is an economic necessity. If you’re someone who can’t or won’t use digital payment, you can be left excluded from mainstream society.

We believe that we need to keep cash viable as it declines. We need a clear government policy position on cash – giving certainty that until digital payments work for everyone, we will maintain an effective cash infrastructure. Consumers need to have guaranteed access to cash, and to be able to spend it. And underpinning this, we need to radically rethink the complex network which moves physical money around to ensure that it is affordable in a low-cash economy.

City A.M.'s opinion pages are a place for thought-provoking views and debate. These views are not necessarily shared by City A.M.

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