UK heading to CASHLESS future ‘SOONER than we think’ – but consequences could be DIRE
BRITAIN could be heading towards a cashless future “sooner than we think” as debit cards continue to overtake physical money as our main payment method. The number of people using notes and coins has more than halved compared to figures from 20 years ago, with forecasts predicting just one in six people will be using cash in ten years time.
By LEVI WINCHESTER
Express.co.uk
Thu, Oct 18, 2018
Natalie Ceeney, former chief Financial Ombudsman, has warned “the economics supporting the provision of a cash infrastructure are under threat” but predicted physical money will still be needed “for decades to come”.
The cost of cash – including printing new notes, running cash machines and moving cash around – amounts to a staggering £5 billion a year.
This means retailers with fewer customers paying in cash are more likely to stop accepting notes and coins, according to Ms Ceeney, as the process of collecting physical money becomes increasingly expensive.
Ms Ceeney, who is now independent chair of the Access to Cash Review, predicted our cash infrastructure will reach a point where “the easiest thing for a retailer to do is to stop accepting cash”.
Speaking to This is Money, she said: “Fewer transactions means less income for the commercial providers running this infrastructure.
“But at the same time, costs are largely fixed and don’t fall away as cash usage drops.
“So basic economics tells us that either retailers and banks need to pay a lot more for using cash, or providers of the infrastructure need to radically cut their costs.
She added: “When only a small fraction of customers pays in cash, it’s worth risking losing them to save on the costs of handling cash.”
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