Cash is Key to a UK Recovery
Oct 27, 2021
Two thirds of small and medium businesses point to cash use as being key to the UK’s post lockdown recovery, even as one in five people report still being unable to pay with notes and coins. Consumer association Which? is taking action to resolve this conflict and preserve cash for the benefit of all.
A Post Office survey of 500 small and medium businesses uncovered strong support for cash use, with 66 percent looking to cash to aid the nation’s economic recovery. This is backed up by their separate consumer research, in which a third of people said that without cash they would be less likely to shop in their local community, putting smaller businesses already struggling after lockdowns at high risk. A quarter of businesses said they would struggle to operate without cash.
Cash is vital to the effective functioning of a localised economy like ours.
Alongside record-breaking cash withdrawals and numerous initiatives aimed at preserving the right to access and pay using cash, these statistics make a clear case for the benefits of physical money both on a personal and a macroeconomic level. However, recent research from Which? demonstrates the issue is not as straightforward as it seems.
It conducted two surveys, covering over 3,000 people, to gauge the current shopping experience with regards to payment choice. One found 18 percent of shoppers had experienced rejection of a cash payment, with 16 percent of these individuals subsequently unable to pay at all. The other survey identified the occasions when cash refusal was most likely to occur, with buying groceries accounting for the majority (35 percent) followed by small purchases in shops (31 percent) and buying refreshments such as takeaway coffee (31 percent).
Which? is spearheading a two-pronged approach to tackle the ongoing problems. First, they launched the Cash Friendly Pledge earlier this year, calling on businesses to make a public pledge that makes it clear to customers that their cash is welcome. Major retailers including Aldi, John Lewis and Lloyds Pharmacy have signed up alongside some 200 businesses, giving payment choice a powerful boost.
The cash pledge campaign has been most helpful as a discussion point with customers, especially following the return to trading after the lockdowns, as many other local independent businesses aren’t accepting cash.
Secondly, Which? is calling for immediate action from the Government to make good on their promises to protect cash. It proposes the Financial Conduct Authority be tasked with tracking levels of cash refusal and, if necessary, developing solutions should it prove to be continuing on a large scale.