The rush to a cashless society is increasingly marginalising the elderly and disabled

People are increasingly finding themselves cut off from retailers and services they rely on. This must be addressed as a matter of urgency, writes James Moore

No longer welcome? An increasing number of businesses are going cash-free (PA)

Access to cash matters, as has been recognised by financial watchdogs.

The Financial Conduct Authority (FCA) and the Payment Systems Regulator together publish data on the location of cash access points, including information about opening hours and accessibility, every three months.

The latest report, published last week, found that 95.5 per cent of the UK population is currently within 2km of one of these, with 99.7 per cent within 5km.

Leaving aside the fact that 5km is quite a distance for an elderly or disabled person to manage in an area with limited public transport, an issue that has been much less widely discussed is their ability to use the cash once they’ve taken it out of the ATM.

This is just starting to become a challenge.

The issue was raised with me by the York Disability Rights Forum, which highlighted the case of one of its members.

The person in question has learning difficulties and is unable to manage a bank account. As a result, they rely on cash to go swimming, for example, or to purchase food on the go afterwards. Increasingly, they’ve found themselves unable to do this because businesses are refusing their money.

This is part of an ongoing trend. London’s O2 has a wide range of attractions, including a cinema and multiple restaurants and stores. It also plays host to some of the world’s biggest music acts. It has gone cash-free.

Companies such as Tesco and Amazon have been experimenting with cashless walk-in, walk-out stores. The number of card-only self-checkout terminals across the grocery sector has also been rising.

It isn’t just the giants. A recent FCA/Savanta report found that the vast majority of smaller firms were willing to accept cash. Some 98 per cent said they would never turn a customer away. But at least some retailers, and some other businesses, have clearly been doing just that. The forum was quite right to raise the issue.

It isn’t hard to see why this is happening. The use of cash has been in long-term decline, and the trend was exacerbated by the pandemic, which saw the contactless payment limit more than doubled to £100.

UK Finance, which looks at all methods of payment annually, recorded a 35 per cent decline in the use of cash in 2020, the most recent year for which data is available.

The British Retail Consortium’s figures for its sector found that cash accounted for just 15 per cent of payments by value that year, down from 20 per cent in 2019, and 30 per cent of payments by volume, down from 37 per cent. This is a reflection of the fact that cash is most often used for smaller payments – perhaps a soft drink, a newspaper or a bar of chocolate.

As the decline continues, the number of businesses going cashless will inevitably rise. Cash transactions are already much more costly to process than card or phone-based payments. This is becoming a particular issue for those small businesses that may be only marginally profitable.

The problem is that the response – going cashless – marginalises people with certain types of disability. It cuts them off from an ever-widening range of shops and services, perhaps preventing them from using the ones that offer the best value for money – or just the ones that they like.

But this is an issue that goes beyond disabled people. UK Finance’s figures show that the elderly remain active users of cash. In 2020, people aged 65+ made a similar number of transactions per person (575) as those aged 25-34 (601). However, 160 of those payments were made in cash, compared with just 84 for the younger group.

Overall, cash remains the second-most-popular method of payment, being used for 18 per cent of transactions. The FCA/Savanta report found that 5.4m adults (10 per cent) relied on it for all, or most, of their daily purchases.

The watchdog’s reports on access to cash show that while bank branches have been closing at a fair clip, Post Offices have been used as a means of offsetting the impact. And an effective one.

The regulators’ monitoring of access to cash, along with the publicity that the issue has received, has, I think, played an important role in preserving it.

However, it is clearly now time to look at the decline in the number of businesses that allow customers to pay in cash, which is starting to pose serious challenges to vulnerable groups.

This could also be subject to monitoring, publicity, creative solutions and possibly political or regulatory intervention.