According to a recent report, the use of cash to pay for transactions in the UK is declining fast and risks leaving millions behind - particularly elderly or vulnerable adults who are not familiar with credit and debit card payments and those living in rural areas.
How many people actually use cash?
In 2013, 55% of transactions were cash-based and 45% were made on either a credit or debit card. The use of cash fell below cards for the first time in 2015 and today accounts for just over 40% of all transactions made – based on these trends, this would see cash disappear from our streets by 2026.
While the report doesn’t envisage the complete disappearance of cash, it does predict that by 2034 cash use would have flatlined at between 10 and 15% of all transactions, with the remainder being either card or mobile payments.
A cashless society presents a range of challenges to a range of different demographics. You might think this is a problem primarily for elderly residents who are unfamiliar with or mistrustful of technology. While it’s true that this does present a huge challenge, others are affected too – such as those living in rural or isolated areas with poor internet connections and also vulnerable or disabled people who rely on cash as their only means of making payments.
Will cash disappear in the UK?
A small but significant landmark in the roll-back of cash in our lives was the attempt last year by the Treasury to consult on abolishing 1p and 2p coins. Although the immediate public and press outcry poured cold water on these plans almost straight away, it seems likely this issue will find its way back on to the agenda given that low-denomination coins have already been withdrawn in more than 30 countries worldwide.
The decreasing usage of cash and cheque payments and the rise of online and mobile banking has fuelled a drive by high street banks and larger building societies to reduce their presence in towns and villages across the country, in some cases leaving villages with no financial services provider at all. This risks driving smaller communities into isolation if more cannot be done to ensure banking remains easily accessible to all.
Come what may, it’s clear that the 4th industrial revolution is underway and technology is set to transform all of our lives, perhaps in ways we can’t yet foresee.
At Ipswich Building Society we believe in digital and we’re working hard to adapt to the changing world around us and bring in a digital platform for our members - however, we strongly believe that our digital offering should complement our branch experience rather than replacing it entirely.
We’re pleased to have demonstrated our commitment to rural communities across Suffolk by maintaining a thriving branch network – particularly in the cases of Halesworth and Aldeburgh where we are the only financial services provider left in the town.