Going cashless would be a big problem for millions – RSA report

Tens of millions of people would struggle to navigate a cashless society, although only 17% of payments are now made with notes and coins, according to a report.

Going cashless would complicate budgeting and create a “major inconvenience” for another 15 million, the Royal Society of Arts (RSA) noted.

Thousands of bank branches have been closed in recent years and access to cash withdrawals is under threat.

The RSA said the “sprint to digital” poses huge risks as finances are tight.

“For millions of people, their relationship with cash is critical to the way they manage their weekly budget,” said Mark Hall, author of The Cash Census report.

“Although online banking and online shopping are becoming more common, our research shows that the percentage of the population that relies entirely on cash remains unchanged.”

The report says that while millions of people have benefited from the convenience of things like smartphone payments, others have felt constrained into a world they weren’t equipped to face.

An estimated 15 million people use cash to keep households, the report says, which is all the more important as the cost of living increases.

Liverpool Walton and Bradford South constituencies had the smallest decline in cash withdrawals and were among the most disadvantaged in the UK, it said.

Among those wanting to keep cash going is Leeds-based Joanne Batty, who said it’s still the “simple and easy” way to pay and manage finances.

“It’s hassle free and hassle free,” she said, explaining that she liked the control that you as a consumer had with notes and coins.

The 51-year-old said a “traumatic” episode in which she was the victim of a scam meant she was now much more skeptical about online and digital payments.

The RSA – or its full name – The Royal Society for the Encouragement of Arts, Manufactures and Commerce – used surveys and interviews during its research.

It also suggested that as opposed to the cash addicts, there were another 11 million people who were cashless converts. They strongly preferred digital payments and saw no benefit in using cash.

These included Craig Purr, a 32-year-old commercial insurance broker, who said cash is more inconvenient because you usually have to go to an ATM to get it.

Mr Purr, from Cambridge, said he instead carried cards in his wallet or used his smartphone to pay.

“My personal and selfish point of view is that we don’t need cash. It’s outdated because technology is moving so quickly,” he said.

This is the first major study of cash addiction since the Access to Cash Review in 2019.

The author of this 2019 report, Natalie Ceeney, said: “The question we asked ourselves three years ago was, is the UK ready to go cashless? The answer is still no.”

Recommendations in the latest RSA report included:

Martin McTague of the Federation of Small Businesses said: “One in four small high street businesses say cash is still the most popular payment method for customers.

“This new report rightly suggests a combination of innovation in free access to cash and investment in digital skills as the way forward.”

The closure of thousands of bank branches and ATMs has sparked debate about access to cash and the ability for small businesses to collect their earnings locally.

Major banks recently signed a new voluntary agreement whereby an independent assessment of local needs is conducted whenever a branch is closed.

These reviews could recommend opening a community branch, installing an ATM, or upgrading a post office. The banks undertake to deliver everything that is recommended.

The government legislates to give the Financial Conduct Authority oversight of access to cash. It has also paved the way for more convenience stores to offer cashback to their customers even if they don’t make a purchase.