IT is estimated that the UK could become a cashless society in the next 15 years.
But according to consumer organisation Which?, nearly half of Britain – or 25 million people – would struggle without access to cash.
There is a risk to rural communities, with substantial black spots in digital coverage where digital payments are not possible, because, despite progress, there remains limited access to broadband.
Read more: Millions will lose out in dash to go cash-free
Which? also raised concerns about a risk of increased debt. The tangibility of cash is said to make it easier for some people to keep track of their purchases, while the use of cards can make spending far too easy and online financial management can make it more complicated for some to manage household budgets.
The consumer organisation says there is the risk of greater financial abuse in the digital world, where vulnerable consumers could be taken advantage of by partners, carers, family members and and scammers.
There are also concerns about a risk to personal independence, with many older people and those with disabilities being deprived of being able to manage their affairs in cash, with digital payments seen as handing over control to someone else.
Read more: Regulator investigates the scale of bank cash machine closures
Which? further warns the move to a cashless society could reduce the opportunity for interaction, which it says is “important for mental health and making human contact”.
There is also the question of how to deal with a significant IT failure, which the UK has seen several of, which, without a cash backup, could leave us without any means of accessing money.
Some of these concerns have surfaced in Sweden, which is expected to become the world’s first cashless society, going 100 per cent digital by March 2023. Today, digital payments through a card or mobile apps are so common and trusted that many Swedes no longer carry cash at all.
Strong broadband coverage, even in remote areas, and a tech-savvy population of 10 million have contributed to the cashless trend picking up more quickly in Sweden than elsewhere.
It is estimated that one in five Swedes don’t withdraw cash anymore, and only 13 per cent reported using it for a recent purchase, compared to 40% in 2010.
Some 85% of transactions in Sweden happen by card, online or Swish, a smartphone payment app created by the country’s six largest banks to provide an instantaneous mobile platform to help customers make electronic payments easier.
Read more: Millions will lose out in dash to go cash-free
Several years ago, Stockholm’s public transport stopped accepting cash. Tickets are pre-paid, purchasedpaid throughby using a mobile application or bought by debit/credit card from the driver or a ticket machine. But the speed of change and the decline of cash have left little time for experts to assess the risks that come in such a digitally-advanced country.
The Swedish National Pensioners’ Organisation has argued that Swedes who can’t or won’t accept the cashless trend can end up feeling even more excluded than they might elsewhere with the majority of local bank branches stopping letting people take out cash or even bring cash into the bank.
It also costs to use cash. Some have complained that while most Swedish banks stopped accepting cheques years ago, they have pushed up fees for in-branch bank transfers. Government experts have been concerned that people could be left without any money should its computer networks become victim to an attack.
One survey by the Swedish polling firm Sifo last year suggested that seven out of 10 Swedes still want the option to be able to use cash as well as cards and apps.
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