Thought Leadership & Community


Londoners take to cashless payments as north-south gap emerges.

By Gavin Jackson Financial Times

The shift towards a cashless society is happening fastest in London and the south of England while other parts of the UK continue to rely more on paper money, according to figures published on Monday.

Cash withdrawals fell by 8.7 per cent in the UK capital during the first four months of 2019 compared to the same period last year, 7.9 per cent in the rest of the south-east and 7.7 per cent in south-west England, said Link, a body representing ATM providers.

By contrast, withdrawals fell by 3.7 per cent in north-east England, 4.7 per cent in Northern Ireland, 4.9 per cent in Yorkshire and the Humber, and 5.4 per cent in Scotland.

Link’s figures suggest the move to a cashless society may be exacerbating economic divides within Britain as the prosperous south shifts towards online banking and contactless payments faster than the rest of the country.

John Howells, Link’s chief executive, said: “These regional variations are important, and Link will ensure that areas which are not moving away from cash as quickly as others still have their cash access protected.”

The UK is one of the countries turning away from cash most rapidly. Cash accounted for only 28 per cent of transactions in Britain during 2018, roughly half the rate of a decade ago, according to figures from UK Finance. The business lobby group estimates that paper money will only be used for 10 per cent of purchases by 2028.

The reduced use of cash has intensified fears that people in small towns and rural areas will be left without face-to-face services at banks as unprofitable branches are shut.

Last year, Link began to cut the interchange fees paid by card issuers for allowing customers to withdraw money, in a development that raised fears about closures of ATMs, notably in rural communities.

Roughly 1,200 ATMs have shut down in the first six months of 2019, according to Link. Link and the banks have previously argued that many of the free-to-use ATMs are close to each other, making the system inefficient.

Gareth Shaw, head of money at Which, the consumer group, said: “While digital payments are rising, almost two million people still rely on cash on a daily basis. It is also an important back-up when digital systems fail.”

A report by the Commons Treasury select committee, published in May, said that the government and regulators must be prepared to intervene to keep bank branches open and prevent vulnerable groups from being left behind by the transition to a cashless society.

But the government responded by saying it would not intervene to protect access to banking services in small towns and rural areas.

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