Is the cashless revolution leaving people behind?

January traditionally marks the great return of the unwanted Christmas gift, either returned directly to a shop, or, more likely with the rise of internet shopping, to eBay. But if you’re that difficult person who everybody struggles to buy for, you might have just received money.

But the days of physical currency now seem numbered. In the UK, especially in London, cashless payments are now king, and intent on replacing cash altogether.

The capital is home to one of the most concentrated volumes of cashless payments in the world and the sheer pace at which this shift has taken place has been remarkable; mobile payments accounted for £370m in the first six months of 2017, up 336% year-on-year. Meanwhile, contactless payments themselves accounted for £9bn across the same period. Finally, in June of last year for the first time, cash was overtaken by card payments in the UK.

Yet all of this innovation comes with consequences and may, in fact, be leaving people behind. Strikingly, statistics released last year also showed that only 33% of Brits actually wished to see a cashless society.

In reality, this pace of technological change has led to banks accelerating the numbers of bank branch closures as people change their habits to bank online, and this ever-growing number of closures has the potential to have a particularly exclusionary effect upon older age groups.

A drive for a cashless society also puts pressure on individuals to be banked and signed up to the financial system. But with whole economies based on cash – from charity collections, restaurant tips and casual jobbers, there are legitimate questions about how these groups will adapt. Perhaps a grim reality, but there are also real fears that homelessness could be made worse, as people are unable to hand over loose change to those in dire need of it.

In March 2017, the House of Lords Financial Exclusion Committee published a report into this, highlighting serious concerns that those on the margins of society, as well as elderly and disabled people, are being left behind.

Its report called for the government to introduce a dedicated Minister for Financial Inclusion and stressed the need for regulators to work more closely with government to promote further innovations in the provision of online and mobile banking services to this demographic.

The report argued that while there are some business, legal and regulatory incentives for financial firms to act, “at a certain point it has to be recognised that the market is unlikely to provide a full solution.”

Thankfully, the Government did agree with one of the key recommendations to introduce a dedicated ministerial position to tackle financial exclusion, and Guy Opperman was selected for the role following the report.

But the belief from the committee that the market is unlikely to provide a solution could suggest that government and regulators will look to impose conditions on financial firms.

For businesses at the sharp end of providing such solutions – they should now be engaging with the Government to help shape the look of any requirements, and should not leave the future policy solely in the hands of the regulator.

For more information on how GK can support your financial services business, contact

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