New trial to test 'coinless' Scotland causes concern for fundraisers and homeless

The trial forms part of the Community Access to Cash Pilots, supported by the major banks and consumer groups. 

Starting on Thursday in Denny,  it aims to replace low-denomination coins and is one of three locations across the UK that is taking part.

But significant amounts are donated through coins dropped into charity tins at shop checkouts, or buckets held by on-street collectors.

Before the pandemic, more than half of all donations to UK charities were made with cash, according to the Charities Aid Foundation (CAF), an industry body. A separate survey by CAF found that £320m ($414m) of charitable donations came from loose change in 2018.

And there is concern for the homeless on the streets who rely to a certain extent on generous cash donations.

It has forced fundraisers to adapt their systems to make dealing with digitised, contactless and card payments more easily.

READ MORE: End of cash? Use of coins and banknotes slumps by over a third in a year during pandemic

Shrap, the company that is behind the Denny pilot makes use of an app which it says takes the hassle out of accepting cash.

Its vision is "that you never need to handle coins again".

But it says it does not want the country to go fully cashless, just coinless.

The three-year-old Dorset company says in its PR materials that "by storing a digital 'float' on Shrap, change can be given to customers through the service with no need to handle coins.'

They say: "Shrap enables customers to go coinless, not cashless, and for businesses to continue to accept cash, but without the expense and hassle of coins."

It went on: "Cash is at risk in the UK. With a significant reduction in cash use - particularly during the Coronavirus pandemic - the cost of maintaining the infrastructure to sort, transport and distribute cash has become unsustainable."

They system work for customers who pay be cash to take their change on a Shrap app or card.

Up to £150 can be stored on the app, and it comes with an accompanying card which can be used to send money and make payments of up to £10.

They say when using cash in a local shop, the business can give change onto a card. Customers can store their change on the card, or an app and make small payments to shops and friends, anonymously and for free.

The independent Access to Cash Review in 2019 found that a large proportion of people continue to rely on cash.

But the pilots were set up as businesses complained of the rising costs and inconvenience of handling cash.

Natalie Ceeney chairman of the Community Access to Cash Pilots backed the coinless pilots saying that it will allow businesses to continue accepting cash but without the expense and hassle of handling coins.

"Removing the need for coins in a cash transaction is another step to help us keep cash sustainable," she said.

“As cash use reduces, we need innovation to keep it viable for those who need it, whether that's delivering cash to people's doors or products like Shrap which help retailers and consumers manage their small change. One of the big challenges in keeping cash in circulation is that retailers need to be able to give change - but if the local bank branch closes and if they run out of coins, then they can't just nip out to replenish their cash float. Instead, they face closing the shop and then driving, parking and queuing. The hassle of managing cash is one of the main reasons why so many shops are now going cashless.

"Shrap is a great idea because it means retailers can give out small change on a card rather than in copper and silver, which also helps consumers save the pennies. Far from driving us into a cashless society, it can support small businesses and protect cash."

To highlight what Shrap call the ‘waste’ of coins, it hosted hosting a coin exchange event in Denny on Thursday and Friday. The local community were invited to bring in their change jars and exchange their unused coins for money on a Shrap account, which can be spent easily with local businesses, providing a boost for Denny’s high street.

But while some may find pocket bulging loose change a burden for others it is a lifeline.

READ MORE: Two million Scots struggle to pay with coins and notes during pandemic

Gavin Yates, chief executive of Homeless Action Scotland said: “Street begging is a result of poverty and failed social policy. The move towards a more cash-free society will inevitably have an impact for those who seek support from the public on Scotland’s streets.

“But the real issue for people in this situation is not about cash per se but a society that does not properly support those who are forced into asking for help.”

One man, Derek, a recovering alcoholic, who was homeless for six months and has resorted to being 'on the streets' before finding a room in Glasgow to share two months after the pandemic hit last year said that people were more likely to hand over loose change to people on the streets and was worried that it could be a matter of life or death for some.

"Yes it is demeaning but it is also dangerous. There should be nobody on the streets rough sleeping, but you can get enough for what you need like a meal," he said. "I dread to think what happens if people no longer have loose change. You don't have debit cards, you need an address for that, so what happens."

He said there should be more organisations like Street Change Glasgow which allows the public to make donations at contactless giving points in the city centre or online."

The Charities Aid Foundation (CAF) say that while there will likely always be a need for face to face fundraising events and coins, the Covid crisis will have accelerated digitisation for some charities.

Caroline Mallan, head of external affairs at the Charities Aid Foundation (CAF), said: “This experiment could perhaps consider encouraging people to routinely donate some of their new digital spare coins to their favourite causes – making a real difference to the charities that have been there for our communities through the most difficult of times."

She said the pandemic had meant that charities had started using card readers instead of charity tins and moved their fundraising online as much as possible, but warned it but takes time.

The number of donors making cash donations has subsequently seen a substantial drop off during the Covd-19 lockdown.

According to the CAF, cash donations dropped from 34% in March, 2020 to 13% the following month and has remained at "very low levels" compared to previous years.

Research earlier on in the pandemic found that four in ten people (41%) said that they will avoid using cash wherever possible because of the coronavirus, and six in ten (60%) think it is more hygienic to use contactless debit or credit cards, rather than cash.

Last autumn a report from the National Audit Office found coin production at the Royal Mint fell by two-thirds between 2011 and 2020, and that it could go a decade without producing any new 2p or £2 coins.

Michelle Cook, head of Scotland at the Chartered Institute of Fundraising said it has now become important to provide people with the easiest and most convenient way to donate.

"We recognise from our membership pre-pandemic that there were concerns around the adoption of cashless donations and the loss of physical coin collections. We heard examples of where people collecting small change on a regular basis does provide needed and welcome money for local and smaller charities.

"These changes might be symbolic of wider and probably more long-term change in how people give, and how people use cash more generally.”