OVER 2m Scots have been refused payment with notes and coins during the pandemic, threatening the viability of the cash network.

Natalie Ceeney, chairman of the Access to Cash Review has now warned that cashless payments which are "creeping into the wider economy" could now prevent people from accessing everyday services such as buying food or paying for electricity.

There is concern the government is still yet to introduce legislation to protect cash it promised almost a year ago and now calls have been made to make the Financial Conduct Authority regulator responsible for tracking cash acceptance levels.

A study by the consumer organisation Which? warns of a cash network in danger of crumbling revealing that 30 per cent of Scots reported being unable to pay with cash at least once when trying to buy something since March, when coronavirus restrictions were first introduced.

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 And it was revealed that despite the lockdown affecting use of cash machines, around one in 25 across in Scotland said they were still relying on cash, which would equate 220,000. Some 14 per cent, equivalent to over 760,000 in Scotland, also said they would struggle without it.

And around 40 per cent, representing 2.2m in Scotland, said that they still viewed cash as an essential backup during the pandemic.

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Ms Ceeney, whose review revealed eight million people were at risk in the UK from the demise of cash said: "The Government said it intended to protect access to cash at last year's Budget. However, time is running out to take action. Right now, businesses involved in the cash infrastructure are taking commercial decisions to close ATMs or bank branches. Retailers faced with long drives to pay in their cash will increasingly go cashless. Once our cash infrastructure is gone, it will be impossible to put it back.

“Of course, there are lot of people who are happy using digital or card payments only, but there are millions who are not. Those who rely on cash are are the oldest and poorest in society. Sleepwalking into a cashless society could prevent people from accessing everyday services such as buying food or paying for electricity. We need the action that government promised, and now."

Data shows that more than one in ten of Scotland's network of cash machines have been shut down at a rate of over two a day as the number of cash withdrawals has plummeted during the pandemic.

More than 600 have been shut between November 2019 and September last year, with hundreds more believed to have been temporarily shut because they are located in premises that were closed due to Covid restrictions.

Analysis produced exclusively for the Herald by the consumer organisation Which? in October revealed that nearly half (47%) of the over 1000 bank branches which were open in Scotland five years ago will have shut by next year.

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Data provided by LINK, the UK's main cash machine network, has revealed that the number of ATMs dropped from 5,866 in November, last year, to 5,239 in September. There were 4022 free-to-use cash machines across Scotland while 1,217 charge - meaning that in one in four of the nation's ATMs you have to pay to get your money out.

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Ms Ceeney said: "When we published the Access to Cash Review in 2019, 'cashless' businesses were largely limited to city centre coffee shops and bars. For them, the vast majority of their customers already paid digitally. Our concern was what would happen if others followed their lead. You can chose not to go to a bar, but there are few alternatives to your utility provider, your local supermarket or your local council. "In Sweden, which is very close to being a cashless country, it was shops and banks going cashless which did the most to kill off cash.

"When the Swedish health service declared itself cashless, politicians cried ‘enough’ and put the brakes on, introducing legislation to oblige banks to provide suitable cash access to their customers. Not everyone in Sweden, or in the UK can use digital payments - millions still need to use cash to survive. But there is no point having cash if you can’t spend it."

The new survey of 2,000 people, found that they were most likely to be refused the option of paying in cash when shopping for groceries, which accounted for more than a quarter (28%) of incidents.

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This was followed by leisure activities such as going to a pub or restaurant (24%) and buying cleaning products (21%).

The survey also highlighted how rapidly the coronavirus outbreak has changed the way many people pay.

More than half (53%) of people said they had replaced some or all of their cash use since the first lockdown. Of these, just under half (46%) said that their declining cash use was as a result of shops prohibiting or discouraging it.

The consumer organisation said: "The figures are highly concerning given the significant numbers of people that still need cash to pay for essential goods and services, particularly now that the UK is once again under tough coronavirus measures."

The potentially serious consequences of businesses refusing cash were highlighted by the experience of consumers who have reported their problems to the new study.

In November, James Boswell, a diabetic, stopped off at a service station in urgent need of food after getting stuck in traffic for several hours on the M25, which meant his blood sugar levels dropped.

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Despite explaining his situation, the first food outlet he tried, a Nando’s restaurant, refused to serve him as he only had cash with him. The same happened at another restaurant, El Mexicana, but eventually he was able to pay in cash at KFC.

Meanwhile, two in five shoppers (42%) told the new study that they were using less cash because they thought card payments were safer, a notion that prompted some businesses to encourage contactless payments or go entirely cash free in response to the pandemic. This approach was first taken at the start of the pandemic, when there were what Which described as mixed messages about the safety of cash.

The Bank of England advised in April, during the first lockdown that the risk from banknotes is "no greater than touching any other common surface, such as handrails doorknobs or credit cards", and in November concluded that "any risk from handling cash should be low", particularly compared with ‘hightouch’ objects such as shopping baskets, self-checkout touchscreens or products for sale.

Which called on shops to continue to accept cash given the "low level of risk, combined with the significant number of people" who still rely on it. It it would ensure people, particularly those who are vulnerable, are not left in a position where they have no other way to pay. Consumer groups and businesses wrote to the Government last month urging it to protect consumers' access to cash on the high street.

In particular, they want to ensure that none of the big banks is allowed to withdraw from either the Link cash machine scheme or the Post Office's 'banking framework'.

Combined, the schemes provide bank customers with a vast network of cash machines and post office branches where they can withdraw money free of charge.

The letter, sent to the Economic Secretary to the Treasury John Glen, is signed by the heads of the ATM Industry Association, Petrol Retailers Association, National Federation of SubPostmasters, cashpoint operator Cardtronics and advocacy group Positive Money.

The signatories want a pledge that any legislation – promised by the Government in the New Year – would guarantee "widespread geographic access to cash" and a minimum number of "withdrawal points" in towns and villages, protecting access to cash and wider banking facilities in the UK.

Jenny Ross, Which money editor, said: “Cash is still a vital way to pay for millions of consumers, so to see such a high proportion of people report that they have had difficulty spending it is very concerning, particularly now we have entered another lockdown.

“We have repeatedly warned about the consequences that coronavirus will have on what was an already fragile cash system, but nowhere near enough action has been taken by the government or the regulator to understand the scale of this issue.

“The government, which is still yet to introduce legislation to protect cash it promised almost a year ago, must urgently make the FCA responsible for tracking cash acceptance levels. Failure to do so will see the cash network crumble and leave millions of people abandoned.”