Should the government intervene to stop cash disappearing, as the Access To Cash panel has urged?
YES, says Andrew Martin, chief executive of Retail Financial Consulting.
It’s essential that cash remains a staple of British society in order to maintain social inclusion and economic stability.
One need only look at Sweden, which is on the verge of becoming cashless, before realising the detriments of its extinction in our own society. As of November, Sweden had to introduce emergency laws as it became clear that the social consequences of a cash-free society would be too severe.
The consequence in the UK would be the creation of a bi-polar society, whereby a line is drawn between those without the need for cash, and those with the need for cash. The latter would typically include homeless people, tradesmen, and other workers who are currently paid in cash, as well as members of society who do not have sufficient access to the internet, or indeed their own bank account.
Consumers must be given freedom-of-choice in their payment options, and that includes full access to cash — which is not prone to power outages, cyber attacks or IT glitches, and maintains an element of anonymity.
NO, says Fred de Fossard, an adviser to The Entrepreneurs Network.
It is easily possible that in 10 years’ time cash will be a thing of the past. And with the right policies, this will be an opportunity for us all.
Between 2007 and 2017, cash payments halved, and today they make up less than a quarter of all payments. Cash is expensive and inconvenient. Handling cash costs businesses £3,000 per year on average, and in an age of instant, internet-powered card payment it is easy to see why businesses and consumers alike are ditching cash in favour of electronic payments.
It is true that 1.5m people remain unbanked, but the solution is not to enforce the use of cash. Open Banking is making financial innovation accessible to all — initiatives like the government-supported rent recognition challenge encourage companies to help people build trust with utility bill payments, so poor credit scores are no longer a barrier to electronic finance.
Cashless societies shouldn’t only benefit well-off early adopters. But thanks to Open Banking and forward-thinking fintechs, this won’t be the case.
Main image credit: Getty