Britain is becoming a cashless society in less than 100 Days

British Sterling pound currency - legal tender of the United Kingdom Union - banknotes and coins

NEWS - WWETV Administration

British Sterling pound currency – legal tender of the United Kingdom Union – banknotes and coins

A report from the RSA (The Royal Society for Arts, Manufactures and Commerce), The Cash Census, has proved that the pandemic has not accelerated the nation’s move towards a cashless society, reinforcing the argument that cash still has a vital place in society for so many people.

The data showed that despite cash usage taking a hit during the pandemic, millions of people across the UK are still reliant on cash and even those that are not reliant still want the flexibility of choice when making payments, with most people choosing to use a combination of both digital and cash payments.

More than 23 million people in the UK used virtually no cash last year, while notes and coins will account for just 6% of payments within a decade, a report predicts. The findings, from the banking body UK Finance, are likely to prompt concern that millions of people could be left behind as the shift to a cashless society accelerates.

During 2021, 23.1 million consumers either used no notes or coins, or used them only about once a month. That was up sharply on the 13.7 million consumers the previous year who did not use cash. That number has grown rapidly: in 2018 it was 5.4 million people; in 2016 it was 2.9 million. At the same time, 1.1 million consumers used mainly cash for day-to-day shopping, according to the 2021 data.

UK Finance said it expected cash usage to continue to fall. It forecast that by 2031, notes and coins would account for only 6% of all payments made in the UK.

“Rather than the UK becoming a cash-free society over the next decade, the UK will transition to an economy where cash is less important than it once was but remains valued and preferred by many,” said a spokesperson.

The organisation acknowledged that some people found physical cash useful for budgeting, adding: “Given the rising cost of living, this may impact people’s use of cash over the coming months.”

This month the Post Office said its branches handled a record £801m in personal cash withdrawals during July, an increase of almost 8% on June, and 20% on the July 2021 figure.

UK Finance said that almost a third of all payments in the UK were made by contactless methods in 2021, up 36% on 2020.

However, embedded finance provider YouLend believes those fears are overblown. Done right, the company’s chief commercial officer Jakob Pethick believes it can actually make life easier for people.

“Rather than intended to isolate members of society, the move to cashless is reflective of businesses listening and responding to consumer trends and preferences,” he tells Verdict. “It’s not about reducing the number of payment options – but increasing them. Most businesses will likely offer a mix of payment options with their audience demographic in mind, realising the benefits of the cashless revolution simply by giving their customers more choice.

“Furthermore, going cashless doesn’t necessarily mean alienating the vulnerable. For example, the Indian government has pushed the cashless agenda to tackle corruption and crime, and to draw in millions who currently live at the margins of society. One element of this is Aadhaar, a digital identity/authentication that relies on fingerprint biometrics. When linked with bank accounts or other methods, Aadhaar lets users authenticate payments, regardless of their literacy, income or access to formal banking.”