A cashless society? Not yet…
The government is holding a six-week consultation to make sure that cash remains available to those who want to use it, throughout the UK. Announced in the March 2020 Budget, this has gained importance as COVID-19 responses has seen a huge surge in the use of contactless payment methods and online payments.
Some sections of society, including the elderly and vulnerable still rely on cash. They may not have access to cards, e-wallets or mobiles to make payments. Cash may also help them budget or manage difficult financial situations.
During the height of lockdown, there were media stories about elderly customers being turned away from bakeries, for example, because they couldn’t pay by contactless means.
The consultation will look at how the UK should maintain a network of cash withdrawal and deposit-taking facilities over time, including the potential role of cashback; the factors affecting cash acceptance; and whether the government should give a single regulator overall statutory responsibility for maintaining access to cash.
Currently, EU law makes it difficult for cash back to be provided if no purchase is made. With increasing numbers of ATM machines being closed as local bank branches become scarce, this option could be more favourable after 31st December, when the transition period ends.
At the moment, the Financial Conduct Authority (FCA), the Bank of England, Payment Systems Regulator, and the Treasury coordinate their separate roles within the cash system, through the Joint Authorities Cash Strategy (JACS) Group. No single authority has overall responsibility.
The consultation will run until the 25th November 2020.