Cash and the Coronavirus

A report released this week by Which? the consumer rights platform, showed that 34% of people surveyed in the UK had been refused the ability to pay in cash at retailers and hospitality outlets.


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While shopping for groceries, 28% of respondents were refused the option to pay with cash and 24% were refused in pubs or restaurants. 

According to the Which? research, around 7 million people in the UK regularly use cash, with around 2.5 million having cash as their only way of making payments.


Early in the pandemic the WHO were widely misquoted in the UK media regarding the safety of touching cash which led to confusion amongst the public and businesses. Paying with cash is no more dangerous than touching the door to get into a shop in the first place.


The obvious immediate issue here is that it is the vulnerable people in society are being refused the ability to buy groceries or make other purchases. However, there is a broader issue - the ongoing marginalisation of the unbanked/underbanked by reducing opportunities to use cash. The number of ATM’s in the UK was already declining before the Coronavirus accelerated the process. 


As well as the unwarranted concerns about handling cash, the fact that retailers and the hospitality sector have been closed for almost a year means there are fewer withdrawals leading the banks to claim they don’t need to support ATMs. In the two years up to mid 2020, banks have removed 8,700 ATMs in the UK and introduced withdrawal fees of up to £2 on 25% of the remaining machines. 


The reduced availability of ATMs, combined with introduction of fees further marginalises the vulnerable. 


It's a vicious circle.


In the UK it is not a legal requirement that businesses accept cash for payments (it is a legal requirement to accept cash for payment of a debt, but not for a retail transaction) meaning there are no protections in place for the unbanked. 


In the US the same legal position applies on a Federal level, but individual States are starting to put protections in place for cash. New York for example, passed a law making it a legal requirement for retail stores, cafes and restaurants to accept cash. They did this to protect the vulnerable. 


Sweden is usually cited as the example of a cashless society, but in 2019 the Swedish government mandated that not only did businesses have to accept cash, but that banks had to continue accepting it too. As Sweden has a lower usage of cash than most countries, they were the first to see the problems of cash being unavailable to those who need it and fortunately reacted to address those problems.


In the UK, the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as well as the Bank of England and The Treasury are responsible for the access to cash. As a response to the issue of access to cash, the FCA have said the 2020 budget ‘should’ enhance their ability to protect people's access to cash. 


It is time for them to go a step further and legally ensure the position of cash and peoples' access to it. The Coronavirus pandemic is accelerating a reduction in access to cash and the ability to use cash which continues the marginalisation of the already vulnerable. 




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