Recently U.S. state legislatures have been taking up the cause to require the acceptance of cash in retail locations. Why? Because 1) cash is legal tender and there is an expectation of ubiquitous acceptance and 2) there is a segment of society that operates in a financial system that relies heavily on cash. Not allowing people to pay in cash is viewed as discriminatory towards the unbanked and underbanked. Massachusetts has such a law requiring cash acceptance and others are considering it.
The UK which has been taking efforts through a variety of initiatives including their Faster Payments platform to eliminate cash is now taking an about-face and considering the implication of reaching a cashless society on those that transaction nearly exclusively in cash. Not surprisingly, the Link ATM network produced a report regarding the availability of cash access. More on that report here.
UK banks and regulators are being urged to act to prevent the country from “sleepwalking” into a cashless society, in a hard-hitting report prepared by former financial ombudsman Natalie Ceeney.
The Access to Cash review prepared on behalf of the Link ATM network, concludes that digital payments don’t yet work for everyone and around eight million adults (17% of the population) would struggle to cope in a cashless society.
The report is calling on Government and regulators to step in urgently to ensure cash remains viable and provide a “Guarantee to Cash Access” for all, including those in remote and rural areas. The action plans also demands that organisations deemed to be providing essential services should also be required to allow consumers to pay by cash.
The publication of the report follows a mid-February plea from the UK’s Treasury Committee for urgent action to prevent the “collapse of access to cash” as ATM numbers drop and bank branches disappear from the high street.
Nicky Morgan MP, chair of the Treasury Select Committee says that tinkering around the edges to preserve the status quo will not work.
“It’s clear that something more fundamental is needed,” she says. “This report sets an expectation that the Government, the regulators and industry will respond with a plan of action. I support this approach and consider that it would be highly negligent for those parties not to provide a considered response”.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group