Cash is facing a steep decline as coronavirus concerns have prompted a rise in contactless payments, yet industry leaders maintain that cash must remain accessible to the public.
“I think cash long-term is still going to be really important. This may have a bit of impact for people that have previously just had both facilities available but use cash because they personally prefer it,” says a spokesperson for the Association of Convenience Stores (ACS), which has been publishing frequent updates for retailers on how to tackle the spread of coronavirus.
“If those people are getting used to making those forms of payment then they might do so more often in the future, but we are still convinced that cash is long term still very important for communities.
“These are exceptional circumstances so we can’t really predict too far ahead into the future, but I think cash still has a role to play especially for those people that don’t have bank accounts or access to cards.”
A 2019 UK Finance report estimated that cash accounted for just nine percent of all payments by 2028, but numbers have dipped drastically over the past week. According to a spokesperson at LINK, the UK’s largest cash machine network, ATM transaction volumes show that consumers’ ATM and cash use have fallen by around 50 percent in the past few days. UK cash use is anticipated to continue to drop following the prime minister’s instructions to stay at home.
Since the start of March, several publications have reported that the World Health Organisation (WHO) advised against the use of cash due to its potential ability to carry the virus. While WHO has not officially issued any formal warnings about the spread of coronavirus through cash, shops around the UK are encouraging contactless transactions and restricting cash transactions. As of April 1, payment providers will increase their contactless limit to £45 from £30 in response to the crisis.
“We are recommending a range of social distancing measures in store,” says the ACS spokesperson. “That includes recommending to customers that wherever possible at this time they use contactless payment. Now that obviously doesn’t apply for the one in 10 stores that doesn’t have contactless facilities, so they will still be asked to pay in other ways and ultimately customers are still able to pay using cash if they need to, but this is just a bit of a shift at the moment into encouraging people to use contactless if possible.”
ACS has not encountered shops to outright refuse cash, though they will continue to monitor the situation. Globally, the refusal of cash has warranted responses from regulators; on March 18, the Bank of Canada issued a statement asking retailers to continue accepting cash following reports of retailers only accepting card payment.
The move towards a cashless society could have grave implications for the 1.3 million adults living in the UK without a bank account. LINK and the Payments Systems Regulator (PSR) operate a financial inclusion programme to ensure access to ATMs. According to a PSR spokesperson, cash must remain a payments option in the UK.
“We know that the UK cash industry has contingency plans in place to deal with a range of scenarios to make sure that ATMs can continue to be stocked, and these are being constantly refined. The industry is closely monitoring developments and will work hard to ensure that customers can continue to pay in a way that suits them,” said the spokesperson in an email.