Cash transactions are fast being replaced by card and contactless alternatives as the UK increasingly moves towards a cashless society. By 2018 in the UK, almost 40% of all transactions were made by debit card (with half of this using contactless) compared to 28% using cash. This is predicted to fall even further towards 9% by 2028.
Whilst for many this move towards a cashless society is positive, there is a real risk that those who are most vulnerable in society (such as the elderly or the homeless) would be at risk of being locked out of banking and payments. It’s estimated this could impact over 5 million households in the UK, or 80% of elderly homes who rely on the use of cash for payments. This exclusion risk has come to life in Sweden, one of the world's leading cashless countries, who have already had to backtrack on full removal of cash across the country due the impact this has on those reliant on cash.
It’s vital that we ensure that financial services are applicable & available to all of society, even when we are reacting to the fast changing events of today. Technology, such as contactless payments, needs to be applied with the full awareness of the impact it can have on those reliant on cash to avoid unnecessary exclusion.
Implementing new technology and avoiding exclusion in financial services is by no means an easy task, however the identification of these risks should be surfaced early to ensure a better financial experience is possible for all.
Analysis has revealed that if current trajectories towards digitisation continue, 8.17 million vulnerable members of society would suffer due to their dependence on physical payment methods. This includes 5.2 million households, or 80% of elderly homes, that rely on cash.