The UK’s cash system is “on the verge of collapse” amid thousands of bank branch and ATM closures. More than 8 million UK adults would struggle to cope in a cashless society, according to a major report.
The report stated: “For consumers, we believe that it is both sensible and commercially viable for the banks and regulators to offer a “guarantee” of cash access.
“In part, they can do this by encouraging innovative ways of accessing cash, rather than just protecting increasingly nonviable ATMs or worse, charging consumers for access.
“To protect cash acceptance, we believe that if we can help the banks keep the costs of cash down as its use declines, and to innovate around cash deposit solutions, then there will be fewer commercial incentives for retailers to stop taking cash.”
The Access to Cash Review recommends that a “guarantee of cash access” should be introduced to help the UK avoid sleepwalking into a cashless society, which would mean businesses providing essential services, such as energy firms and supermarkets, would be legally required to accept cash payments.
Debit cards last year officially overtook notes and coins as the most popular form of payment in the UK, and the review’s report predicted that cash could fall to just 10% of all payments within the next 15 years.
The report’s authors said the UK was “not ready” to go cashless, and that despite the runaway growth of contactless and mobile payments, a “significant number” of people (around 2.2 million) are currently using cash for all their day-to-day transactions.
The consumer group this week also highlighted the vulnerability of digital banking, revealing that British banks were being hit by IT or security failures that prevented customers from making payments at an average rate of more than once a day.
Nicky Morgan, chair of the Treasury Select Committee, said: “The complexity of this issue cannot be overstated, but the simple truth is that leaving the future of cash to be determined by market forces will not work.”