The use of cash in the UK has fallen far more than expected over the past 12 months, according to the Access to Cash Review. Last March it had said it forecasts Britain to be “virtually cashless” by the year 2035.
One quarter of all ATMs now include an extra charge to customers to make cash withdrawals, up from 7% last year. Furthermore, the number of businesses getting rid of cash use due to increasing banking costs is on the rise.
As a result, the number of people being unable to access services is ballooning, with almost two million British citizens believed to have no bank account.
According to data from UK Finance, cash was used to conduct six out of 10 transactions a decade ago, but the trade association forecasts this figure to hit less than one in 10 by the year 2030.
“The UK is fast becoming a cashless society without knowing what this really means for consumers or for the economy,” said the Access to Cash Review’s independent chair Natalie Ceeney.
“Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.”
The Access to Cash Review also noted that unprofitable services including charging ATMs resulted in consumer charges hiking by £29 million in 2019.
This led to chancellor Rishi Sunak compelling banks to offer suitable access to cash, and to roll out a regulation which will allow customers cashback without a purchase.
Analytics company GlobalData said however, that Britain is on the right path to adopting a fully digital society, noting that the country is second only to China for e-commerce as a percentage of total gross domestic product (GDP).
“The British have become very comfortable with taking out their phone or card to pay for even the most mundane daily purchases,” said GlobalData payments analyst Vlad Totia.
“At this rate, the UK should transition at the very least to a predominantly cashless society by the mid-2020s.
“All of these developments point towards one question: what is the point of cash anymore?
“While it can still have its uses, physical money costs a lot to store, transfer and produce. Most coins produced are less valuable than the material used to make them.”