Cash vs. Digital: UK Debates Payment Options

The United Kingdom is preparing to emulate Norway and Sweden in becoming a cashless society, as cash usage has significantly declined in the aftermath of the pandemic.

London, in particular, has emerged as a center for online payments, with numerous retailers discontinuing cash acceptance. The transition has been accelerated by the necessity for social distancing during the pandemic, leading to a surge e-wallets and digital transactions.

According to the World Economic Forum, cash usage has been decreasing globally, with the United States experiencing a decline from 10.4% to 8.6% of GDP between 2021 and 2022 and the Eurozone witnessing a drop from 10.1% to 9.8% during the same period. Furthermore, approximately 90% of central banks are developing plans for central bank digital currencies (CBDCs) that have the potential to reduce cash usage.

The Advocacy for Payment Choice

However, the Payments Choice Alliance opposes this shift and advocates for providing every individual in the UK with payment options. Ron Delnevo, chair of the Payments Choice Alliance, emphasized the importance of payment choice, democratic values, and associated rights.

He expressed concerns about the threat to cash usage in the UK. Delnevo highlighted specific population segments at risk of isolation due to the lack of cash payment options, including those unable to afford new technology, older generations, travelers without access to international cards, and small businesses relying on cash for budgeting purposes.

While some retailers like Sainsburys and Tesco continue to offer multiple payment options, including cash, Delnevo encourages these retailers to provide cash deposit services, enabling businesses to conveniently deposit their cash takings in secure machines located within their stores. The limited availability of bank branches for cash deposits and the inconvenience of post offices prompted this call for action.

Delnevo also mentioned the need for legislation similar to Spain’s Payment Choice Act, which requires businesses to accept cash payments of up to €1,000 per transaction, ensuring that the British public has the same rights as their Spanish counterparts.

The Payments Choice Alliance aims to raise awareness and has engaged with Members of Parliament to address the UK’s lack of cash payment options. Delnevo stated that multiple political parties support the cause and warned that cash payments could become a topic in the 2024 General Election if a UK Payments Choice Act is not introduced in 2023.

The Benefits of a Cashless Society

On the other hand, Martin Bradbury, regional director of financial services UK&I at Dynatrace, supports the move towards a cashless society, emphasizing the economic and social benefits facilitated by digital innovation. He highlighted the transparency provided by cashless transactions through precise records and identifiable digital footprints, along with enhanced security features such as multi-factor authentication and encrypted digital wallets.

Bradbury acknowledged the need for personalized and inclusive approaches, particularly for lower-income communities and older generations, ensuring that interfaces and apps cater to various levels of digital skills and economic circumstances. He also emphasized the importance of data analysis and AI automation in understanding payment behaviors and improving the customer experience for all societal groups.

While there are contrasting perspectives on the future of cash in the UK, cooperation among banks, fintech companies, and the government is crucial in meeting the diverse payment needs of the public, whether through preserving cash options or investing in digital payment technologies.

Author

Alexander Stefanov

Reporter at CoinsPress

Alex is an experienced finance journalist and a cryptocurrency and blockchain enthusiast. With over five years of experience covering the industry, he deeply understands the complex and constantly evolving world of digital assets. His insightful and thought-provoking articles provide readers with a clear picture of the latest developments and trends in the market. His passionate approach allows him to break down complex ideas into accessible and insightful content. Follow up on his content to be up to date with the most important trends and topics - stay ahead of the curve with CoinsPress.