A Cashless Society In The Age Of Covid

At the beginning of lockdown number 1, there was a 60% fall in the number of withdrawals from cash machines. At the same time payment card usage rose for online shopping, and many experts are now claiming that the future of cash could be at risk, which could leave behind an estimated 20% of the population who rely on cash.

With bars, cafes and restaurants closed, people are going out less, thus withdrawing cash in fewer numbers, though potentially withdrawing much  larger sums when they do go out and thus hoarding money. Link, the company that helps operate cash machines, concluded from a recent survey that 75% of people were using less cash with 54% of those asked saying they were avoiding cash due to concerns over who had previously touched the cash. This is despite a recent report that said an estimated 30% of UK residents liked having cash as an option but due to the lockdown were more comfortable with other methods of payment. 

Now with the UK having entered a tiered system-or about to anyway-there are fears that communities in the periphery of the country could suffer from a lack of access to cash. Step forward the hero of the hour, local convenience stores. As Covid accelerates the closure of bank branches and ATMs in smaller and more rural communities, access to cash grows harder, but convenience stores such as one run by Imran Hamid in Denny, Scotland have begun trialling the no-purchase cashback scheme.

As part of the scheme, residents can come in, put their card in a PayPoint machine and request a balance or cash from Mr Hamid’s till without paying any charge. The advantage to the business is that people coming into the shop to withdraw cash may also pick up something else whilst they’re there. Mr Hamid also gets a small fee from the banks per withdrawal, which makes cashing up easier at the end of the day.

Unlike ATMs, these cashback trials mean people are not restricted to withdrawing in multiples, with the average withdrawal being £26.80, about a third of the usual cash machine withdrawal. 

This service has been criticised by some as speeding up the decline in ATMs, something that has come into sharper focus due to the pandemic which has as previously mentioned seen a dramatic drop in the number of cash withdrawals across the country.

As the pandemic reaches another turning point, new schemes are being trialled to ensure that those who need cash can get it, but questions remain over the validity of these schemes and the long term consequences that an increasingly cashless society could have.