A cashless society – good for everyone?

With Covid came a reluctance to handle cash. From a risk management perspective it made sense to ask people to pay via other means such as contactless cards or using phone apps. But, is it good for everyone?

I suspect, given this is being hosted on York Disability Rights Forum’s website, you know the answer will be no.

There are a number of factors which mean that it’s not going to work for everyone. One, is a concern about privacy – everything you buy through a card or device will be logged. If you are in an abusive situation then that could limit what you’re able to purchase.

In February 2020, 10% of adults relied on cash to a very great or great extent in their day-to-day lives, rising to 42% of those aged 85+ (Financial Lives Survey).

Don’t shops have to accept cash?

The European Commission’s view is that they don’t, however it issued a recommendation in 2010 that there should be “mandatory acceptance” of euro notes and coins in the euro area. It needs to be noted that this is a recommendation and I don’t have enough knowledge about currency and legislation to know how this applies in the UK.

Who doesn’t accept cash?

Well, the O2 arena for starters who say they’ve “gone cashless in the arena to speed up sales and reduce our customers’ waiting time.” They do say that there are other ways to pay but then signpost to their app saying “Yes, you can buy food, drink and merchandise via The O2 app, for collection at the bars or merchandise outlets.”

But we’re also aware that a York leisure centre doesn’t take cash – although you do still have to have 20p for the lockers! And Castle Howard has also gone cashless…

Why does going cashless cause problems?

Going cashless requires you have a bank card or payment device such as a smart phone. To have the former, you obviously need a bank account and for the latter, you need a smart device and internet (and still very likely need your own bank account or the bank account details of someone else). Also, how will pocket money work now?! Or giving your kid 50p to grab some milk from the cornershop?

So let’s unpick this a bit more…

You need a bank account

So, who does this effect? Well, a lack of bank account is “the most basic level of financial exclusion” according to Alberto Arenaza on Medium. The article goes on to say that in the UK, 4% of the total adult population lack a bank account. Further, sectors of society that have recieved less education are more likely to be without a bank account. The FCA financial life survey report found that 4% of people from a BAME background don’t have banks, compared to 2% of people from a white UK background.

A parliamentary report, “Consumers’ access to financial services” unpicks why people may not have a bank account:

• Not being able to prove their identity, not having a permanent address or not having a passport, driving license or UK paper utility bill in their name.
• A third of those without a bank account have had one before. But don’t want one, eg because of getting into debt through an overdraft.
• A poor credit score may mean many banks won’t let you take out an account.
• Being illiterate makes all the paperwork impossible without help and often people don’t want to admit they can’t read well.

You need a bank account and a bank card

Even if you do have a bank account there’s a variety of reasons why you might not want to use a bank card including impulsivity and the ways in which mental health can impact on how you manage your money. Or perhaps you’re reliant on others to manage your banking because you don’t have the capacity to do so for yourself. If you have an alcohol addiction and are trying to manage it, you might want to use cash as it reduces the possibility of you being tempted to buy alcohol.

And you need to be able to manage your money and spending yourself

For adults with poor mental health or low mental capacity or cognitive difficulties:

• 42% found dealing with customer services on the phone confusing or difficult;
• 34% were anxious when shopping around for financial products and services;
• 33% put off dealing with financial matters, such as ignoring warning letters,
• and 29% had fallen into debt because they had not wanted to deal with difficult financial situations.

And even if you have a bank account, and a bank card, there may be times when using it isn’t appropriate. Thinking about my own experience with cash and bank cards, I have care support. My carers sometimes go to the shops for me and if society moves towards being cashless, I will either have to go without or trust my carers with my bank card which is not a small thing to take into consideration. Sadly financial abuse is present within the care system. If I’m out and about and want to pay for something, my carers do so on my behalf because handling the card can cause me finger pain. Also, many checkout points aren’t the right height for me to pay if I’m in my wheelchair. Sometimes the card machine has a longer cable which means my carers can hold it in front of me so I can watch the payment but this isn’t always the case. Having to rely on card payments opens me up to financial abuse.

For someone with memory issues, dementia etc, the loss of a bank card may not addressed immediately and with contactless payments, there is scope for people to find a card and misuse it.

Reasons for using cash range, but include it being more convenient, feeling more trustworthy than bank cards, to help with budgeting and to avoid going into debt. Thinking about those of us who are disabled, cash can help us maintain our independence, and being disabled can make managing online banking and phone banking more difficult. This is further impacted by bank branches closing or becoming geographically inaccessible. Of course, not having internet access is an additional factor and disabled people are disproportionatly affected by the digital divide for many reasons, but that is a topic for a different blog post!

Further reading:

• Scope: Accessible banking
• An international perspective on a cashless society
• BBC: Does a cashless society benefit everyone? (2018)

Have you been affected by cashless shops and venues? How has it impacted on you? Let us know in the comments!