By Mark Richards.
The use of cash in the UK has halved over the last decade. It is forecast to halve again in the next ten years. Britain is apparently ‘sleepwalking’ into becoming a cashless society. What would that really mean? As we demonstrate below, some fundamental parts of British life would be changed forever. Including Christmas…
What is it like in Sweden?
First things first. Let us look at the closest we currently have to a cashless society. Sweden is generally held to be the country that is ‘winning the race’ (if that is the right term) towards being the first country to become cashless. Use of cash has dropped to 1% of the country’s Gross Domestic Product (compared to 10% in the Eurozone) and many shops, restaurants and other businesses simply refuse to accept cash. More than 50% of the population have downloaded the instant payment app, Swish and ‘to swish’ has become a verb in the Swedish language.
No need to carry cash, no reason to get mugged – Sweden must surely be a cashless utopia? Not for older people who – according to a report from the Swedish National Pensioners’ Organisation are increasingly feeling excluded from society as they struggle to find banks that will handle or dispense cash. SEB, one of Sweden’s largest banks, only handles cash in seven of its 118 branches.
What would happen in the UK?
If you are not a resident of South London you may be unfamiliar with the Crown and Anchor pub – a pub which used to be burgled on a regular basis. Fed up with this situation, Arber Rozhaja, operations director of the company which owns the pub, decided that enough was enough. He analysed the pub’s total revenue, found that only 10-13% of it was in cash, and – in October – made the decision that the Crown and Anchor would become a cashless pub, instantly making it far less attractive to the local burglars.
The Crown and Anchor is typical of many businesses that would simply prefer not to handle cash any more – and if your client base is young and comfortable with technology, that makes perfect sense.
But the simple fact is a significant slice of the British population is not young: 18% of the UK population is aged over 65 and 2.4% is aged over 85. They make up a big proportion of the 8m people an ‘Access to Cash’ study says would be severely disadvantaged by more moves to a cashless society.
The report, written by ex-financial ombudsman Natalie Ceeney, said that a cash-free society would create problems for those in debt – who would find it more difficult to budget – and for those living in rural areas.
Also hit would be the ‘unbanked’ – the people (estimated at 2m in the UK) who do not have a bank account. Worldwide the move to eliminate cash is a far more serious problem, with 2bn people estimated not to have a bank account.
So the economists and the authors of the report are right – but they are only partially right. Going cashless may be fine if you are in a pub in South London, but if you dig deeper a cashless society threatens our very way of life.
With tongue only slightly in cheek, here are six good reasons why we need to keep our cash:
People in rural areas would be housebound.
Live in the countryside? Don’t have a car? Bad luck. Bus services are uneconomic and without cash to pay Joe’s Taxi, you will have to stay at home. Uber? That is fine if you live in a city, but it will be a long time until ‘ride-hailing apps’ reach the remoter parts of the British Isles.
‘Online banking’ is a fine concept as long as you have good broadband connectivity but – despite repeated government promises – online connectivity in some parts of rural Britain still leaves a lot to be desired. So a cashless pub like the Crown and Anchor might be fine in South London. In the countryside no cash might mean not just being housebound: it might mean that you could not go down to the pub and drown your sorrows…
Lots of windows would go dirty
And lots of hair would stay uncut. Chancellor of the Exchequer Philip Hammond may be itching to dispense with cash as he looks for trackable, taxable transactions, but he may have to wait a long time. At the moment, 85% of payments to the UK’s window cleaners are in cash.
There would be more worried parents.
It is not just giving your children a fiver for a taxi home. Which of us has not had to bail our children out at some point? And it is almost always done with cash.
School trips would end.
On the same principle, schools would largely grind to a halt without cash. “We’re going on a trip. Mrs Wilson says we can take £5 for spending money. And I got my 10m swimming badge. You need to give me £3 for that as well.” I am sorry, Mrs Wilson’s teacher training did not extend to remembering 30 different PIN numbers…
The UK horse racing industry would come to an end.
You may see that as a good thing, but many of us will be enjoying a day’s racing over Christmas. The industry is a substantial employer – especially in rural areas – and without cash, at the racecourse, it would collapse. Besides, if I back a winner – a rare event – I want to see the bookie weeping copiously and counting out the money.
Worst of all, Christmas and birthdays would never be the same again.
Where would Christmas and birthdays be without opening Aunty Marjorie’s card to find a tenner inside? Sadly I am now of a vintage to remember notes of a rather different denomination, but human nature does not change. Somehow I cannot see a child’s eyes lighting up at, “Aunty Marjorie says she’s transferred into your PayPal account, sweetheart.”
And what about the traditional sixpence in the Christmas pudding? “Aw, Mum, I’ve just chipped my tooth on a contactless card.” No, it just does not work. We will have to stick with cash…