Eight million people face struggle as banks dash to ditch cash
A report to be published this week will warn that the rush to a cashless society could lead to widespread financial exclusion.
Findings of the Access to Cash Review indicate that eight million people – 17 per cent of the population – are in danger of being ‘left behind’ as the banks press to replace cash with payment by cards and mobile phones.
Those most at risk include people living in rural communities where bank branches have disappeared from the high street and many cash machines, deemed unprofitable, are being withdrawn.
These issues are often made worse, the review says, by poor broadband and mobile phone reception, making internet and mobile based banking difficult.
Risk: Those at risk include people living in rural communities where bank branches have disappeared from the high street and many cash machines are being withdrawn
Also disadvantaged by the banks’ dash away from cash are many older people who are more comfortable using cash, the indebted and the poor (who might struggle to balance their household budgets otherwise) and some people with physical or mental disabilities who could find it harder to manage their finances.
The review has been funded by cash machine network operator Link, but undertaken by an independent panel chaired by Natalie Ceeney, former head of the Financial Ombudsman Service.
Research conducted by the review panel indicates that nearly three quarters of people believe a cashless society would deny consumers choice of payment methods while 72 per cent state it would leave ‘vulnerable groups of people’ more likely to be scammed or defrauded.
As part of the panel’s work, Ceeney visited Sweden where the Government and the central bank have raised concerns that groups of people were being left behind by the rush to go cashless.
On Friday, Ceeney told The Mail on Sunday: ‘For millions of people, cash is not a choice but a necessity.
‘As cash usage falls, we need to safeguard the use of cash for those who need it and at the same time work hard to ensure everyone can participate in a digital economy.’ The Bank of England said ‘an unmanaged decline in cash use could create financial inclusion challenges and limit choice for people and businesses’.
Consumer group Which? is one of 120 organisations – a mix of retailers, financial companies and charities – that provided information for the review.
It wants the Government to place a ‘duty’ on the Payment Systems Regulator to protect access to cash.