Yvonne Fovargue: Cash can still be king in society
While technology has made it far easier to pay online or by using contactless, the obvious benefits of cash mean that it can never be obsolete.
As I have said countless times, you cannot spend more than you have in your purse or wallet and that makes notes and coins a natural budgeting tool.
The current cost-of-living crisis surely proves the point.
Last month, UK Finance, which represents the banking industry, made much of new statistics that show that contactless now makes up one-third of all payments.
Whether by tapping a bank card, watch or smartphone, the number of such payments "continue to grow in popularity”, they crowed in their press release.
This is all very well, but there is another story here, one far more interesting.
As the researchers admitted, payments using cash still account for 15 per cent of all transactions.
This is despite the effects of the pandemic, when people were unable to shop physically, and despite the closure of thousands of ATMs and bank branches, and despite a great many shops refusing to accept “dirty money”.
We are told often about the “death of cash”, but clearly that obituary is rather premature.
While cash has been in decline historically, the rising cost of living has reversed this trend.
We recently learnt that post offices handled £801million in personal cash withdrawals in July.
This is the most since records began five years ago, and up more than 20 per cent from a year earlier.
The Post Office say that the reason for the extra volume of cash withdrawals at their 11,500 branches is simple: it’s because more and more people are turning to cash “as a tried and tested” way to manage their budgets on a “week-by-week and often a day-by-day basis”.
Who could disagree? Hopefully not the Government.
In fact, the Chancellor of the Exchequer promised back in March 2020, at the start of the pandemic, to legislate to protect cash.
Unfortunately, it has taken over two years for the necessary Bill to be published and it has had to wait till this week to be debated in the House of Commons.
It’s very, very late but I do welcome it.
It will give the Financial Conduct Authority the powers to assess a local community’s cash needs before a bank branch or ATM is allowed to close.
This is important and a step forward, but it could go further.
I would like to see the acceptance of cash made mandatory for businesses, particularly those providing essential products, such as food and medicine.
I would also like to see cashback without purchase become the norm.
Cashback is available at 2,000 shops across the UK, but this is all voluntary and there is nothing to stop the service being withdrawn at any point.
What we need now is a real commitment to cash from ministers.
I know to some this seems like a return to the past. The idea of people taking out cash and physically putting it into pots, while saying something like “this
is what I have for the gas bill, this is what I have for food and this is what I have left”, will remind older readers of their childhoods.