During a committee meeting in the House of Commons last week, Vale of Clwyd MP Dr James Davies questioned experts on the impact a cashless society could have on small and medium enterprises.
Examining witnesses as part of the Financial Services and Markets Bill in a public committee in Parliament on Wednesday, James raised the fact that a number of businesses are now refusing to accept cash, and expressed concern about how potential rises in card transaction costs would affect smaller and medium businesses.
He said:
“I am interested in your thoughts on the increasing number of businesses refusing to accept cash. If that becomes commonplace and we become a virtually cashless society, will that not pose a risk for SMEs, if payment transaction costs rise, for example?”
Responding Natalie Cenney, CBE, Chair, Access to Cash Review, said having spoken “to literally hundreds of small businesses, the main reason that they do not take cash is not hygiene or anything like it; it is the ability to bank cash.”
She added:
“If you go back three or four years, a small retailer used to shut up for 10 minutes at lunch time, pop over the road, deposit their cash in the bank and pop back. What they might now have to do, with the local bank 20 miles away and open between 10 and 3, is to shut up for an hour in the peak of the day, drive, park, queue and drive back. No wonder many shops say,
“You know what? It is only 20% of my customers. I will go cashless.”
“That is why in this legislation, deposit facilities are just as important as cash access. It is an area where the industry is behind. You can have deposit-taking ATMs - they are just as well tested as ATMs that issue cash.
“If small businesses can deposit cash easily, most will keep taking it."
Speaking afterwards, James, who played an instrumental role in ensuring the return of cash machines to Prestatyn High Street after all were lost last year, and earlier this year signed a pledge supporting the UK's cash infrastructure, said:
“Despite the move toward online payments and banking, cash remains king for so many, including the most vulnerable in society, those living in rural areas and small shops and businesses – the lifeblood of our local communities.
“It is a great shame that so many businesses have been forced to go cashless just because they cannot easily access a bank to deposit their takings.
“The loss of so many banks in the Vale of Clwyd in recent years concerns me greatly which is why I have been pushing for a banking hub in Prestatyn.
“A banking hub would facilitate cheque and cash deposits, and cash withdrawals, and banking staff from each of the big banks would be based in the hub on specific days to help customers with community banking issues.
“As I said in Parliament last month, because of cost-of-living pressures, 10 per cent of people are planning to use cash more in the coming six months, and the Royal Society for Arts, Manufactures and Commerce published a report suggesting that 10 million people would struggle in a cashless society.
“The Financial Services and Markets Bill would ensure that existing cash infrastructure can be protected. It is therefore important that it is delivered as soon as possible.”
