(qlmbusinessnews.com . Wed 29th Jan, 2025) London, UK —
Cash vs Digital: UK Government Rules Out Compulsory Cash Acceptance
The UK government has confirmed that shops and service providers will not be required to accept cash, despite growing concerns about the impact on vulnerable individuals who rely on physical money.
Emma Reynolds, the newly appointed Economic Secretary to the Treasury, told the Treasury Committee that there are currently no plans to introduce regulations compelling businesses to accept cash payments.
Reynolds acknowledged concerns that some coffee shops, transport providers, and leisure centres are now cashless, effectively excluding those without digital payment methods. However, she assured MPs that the UK is “not anywhere near” becoming a cashless society.
“We are focusing on ensuring everyone has access to cash through initiatives such as new banking hubs and improving people's digital skills,” Reynolds said.
Although cash remains legal tender in the UK, businesses are under no obligation to accept it. In contrast, countries like Australia are considering rules to ensure essential services must accept cash.
Rising Cash Usage Despite Dominance of Card Payments
According to the British Retail Consortium (BRC), cash was used in 20% of shop transactions last year, marking the second consecutive year of increased cash usage after a decade of decline. Many consumers continue to find cash helpful for budgeting.
Committee members highlighted evidence from victims of domestic and economic abuse who said that cash often provided their only means of escape. Some also faced difficulties paying for essentials like school meals due to cashless systems.
Concerns Over a Two-Tier Society
Disadvantaged individuals told the Treasury Committee that failure to accept cash risks creating a “two-tier society.”
Constantine Louis, an 84-year-old pensioner, said cash payments help him maintain a sense of control. “For older people, when they use cash, they feel as though they are in control. Young people will get older one day and may have the same problems we have — they may start forgetting their Pin numbers,” he said.
Caroline Cawley, a 41-year-old from Edinburgh living with a disability, said cash is crucial for managing her finances. “Cash is important for budgeting reasons. It's much easier to keep tabs on what you've got if you have it physically in your purse,” she explained.
She also raised concerns about the risk of unintentional overspending and bank fees associated with digital payments.
The Treasury Committee will soon publish its recommendations following the inquiry into cash acceptance.
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