Shining a Light on the UK Government’s Disingenuous Role in Trying to Kill Cash

It should perhaps come as little surprise that when it comes to protecting the right to pay in cash, the UK government prioritises freedom of choice for businesses (to reject cash) over freedom of choice for citizens (to use it). 

Almost half of British people have recently been in a place that has not accepted or has discouraged the use of cash as payment. That’s according to a YouGov survey commissioned by the ATM network provider Link. Some 45% of the survey’s more than 2,100 respondents said they had been somewhere in the previous eight weeks where cash was declined or discouraged. Locations include shops, bars, restaurants and car parks.

Residents of London were particularly likely to have experienced this while people in Northern Ireland were least likely. One in five respondents said they found the experience “fairly or very inconvenient.” When asked how they use cash to manage their finances, a fifth of respondents said they put spare change in jars or piggy banks — . Crucially, most of the people surveyed (71%) said they had used cash at least once in the previous two weeks.

The Partial Return of Cash

This chimes with the findings of an October 2022 report published by the Bank of England titled “Knocked Down During Lockdown: The Return of Cash”:

[T]he value of banknotes in circulation remains elevated even two years on from the pandemic, at close to a historic high. This reflects people – up to 60% of the population – holding more cash as a store of value, which is a fundamental role of money…*

While the future trajectory remains uncertain, both in terms of the speed and extent of future decline, what is certain is there remains a significant group of people, with varied characteristics, who value cash…

Prior to the pandemic, the UK had experienced a marked decline in the use of cash to pay for goods and services. Only 23% of payments in 2019 were made in cash, down from around 60% a decade ago. In 2020 when the pandemic was in its early stages, this figure dropped by 35% compared to 2019, with cash accounting for 17% of all payments. Since 2017 cash use had been declining by around 15% each year, so 2020 represented an acceleration of this decline.

There has since been a sustained, if partial, recovery in cash use, and more recently, signs of stabilisation in cash use trends. In 2021, there was a reduction in the rate of decline in cash use, with cash accounting for 15% of all payments in the UK. Moreover, an estimated 73% of consumers said they used cash in January 2022, a notable increase from only around half of consumers in mid-2020.

While British citizens are, as a whole, using a lot less cash than before, survey after survey reveals that most of them do not want to live in a fully cashless economy. And cash remains the preferred choice of payment for millions of people. A poll by Accenture late last year found that 63% of Brits are using cash at least five times a month, second only to debit cards, which are used over five times a month by three-quarters of Brits.

Yet it seems to be getting more, rather than less, difficult to use cash in many retail settings, according to the YouGov survey. British friends and family of mine have reported similar experiences. It would be interesting to hear what UK-based NC readers can add to the picture.

All of this is possible because legal tender traditionally has a very narrow definition in the UK, and strictly applies to money used by a debtor to settle a court-awarded debt when offered (‘tendered’) in the exact amount that is owed to a creditor. In other words, if a debtor is offering to settle a debt in court with legal tender such as cash, the creditor is not allowed to refuse it. Shops and hospitality businesses, by contrast, are.

As I noted in my Aug 16 2022 piece, Is Cold, Hard Cash Making a Comeback?, many retailers, particularly in the more salubrious parts of towns and cities, are taking full advantage of this loophole, despite the discriminatory effects it has on the millions of people who still depend on cash, including the roughly 1.3 million who are unbanked.

Ignoring the Vulnerable

Last Summer, two petitions were organized by cash advocates. The first called on the government to ban shops from refusing cash payments. The second proposed requiring all businesses and public services to accept cash. Between them, the petitions attracted 55,000 signatures, an admittedly underwhelming number. The government’s response was emphatic:

The government does not plan to mandate cash acceptance. While the government recognises the ability to transact in cash remains important to millions of people across the UK, particularly those in vulnerable groups, it remains the choice of individual businesses as to whether to accept or decline any form of payment, including cash or card. This may be based on factors such as customer preference and cost.

It should perhaps come as little surprise that this UK government prioritises freedom of choice for businesses (to reject cash) over freedom of choice for citizens (to use it). This is a government that has always and will always place the interests of private sector businesses over public interest.

Big private sector players, including banks, tech giants, payment processors (primarily Mastercard and Visa) and fintech startups, have clear individual incentives to destroy cash — and have been trying to do so for over a decade. As journalist, author and cash advocate Brett Scott notes, since the pandemic the private sector has turbocharged its anti-cash drive, “as Big Finance, Big Tech and Big Retail have weaponised the public’s temporary fear of physical contact to amplify the anti-cash automation agenda that they already had.”

According to a report published last year by the UK’s number-one tabloid, The Sun, many retailers and hospitality chains in London, Birmingham and Newcastle, including Pizza Hut, Caffe Nero and sushi chain Itsu, have gone fully cashless since the pandemic. Some supermarket chains are experimenting with “checkout-free” stores, where neither cash nor cards are used, though Amazon’s recent u-turn on cashierless stores suggest most consumers prefer the human touch.

At the same time, the UK Treasury and Bank of England are working frantically behind the scenes with private sector players to launch a digital pound. They insist that cash will remain an option yet if a digital pound does become a reality, it will probably mean that even more businesses will eschew the use of cash. This in a country where more than 8 million adults “would struggle to cope in a cashless society,” according to the Access to Cash Report. For many people, it says, “using cash is not a matter of choice, but of necessity.”

Alternative Approaches

Other European countries are taking a markedly different approach. In Norway, the government has proposed tweaking the Financial Contracts Law to strengthen the right of customers to pay cash in physical businesses. Norway is one of Europe’s most cashless economies, but in May 2022 it suffered a prolonged outage to payment card terminals that resulted in widespread chaos, underscoring the inherent fragility of a cashless economy.

In April 2022, the Spanish government went a step further by passing a law forcing retail establishments to accept payments in cash, enshrining the right of consumers to freely choose which payment method to use. In Spain, the overwhelming majority of businesses still readily accept cash. The law also guarantees the right of residents of rural communities to be able to access cash. Since then, Spanish banking associations have signed an agreement to ensure that residents of rural municipalities have access to cash, most notably through Post Office service points.

In the US, as in the UK, there is no federal law preventing businesses from rejecting cash. But local or state authorities in places such as New York City, New Jersey, Philadelphia, San Francisco and Delaware have taken matters into their own hands. King Country Council, in Washington State, is the latest local jurisdiction thinking of banning businesses from banning cash.

By contrast, the UK government says it is working on legislation to ensure that people and businesses have “appropriate” access to cash services, while doing nothing to ensure they can actually use cash. Meanwhile, access to cash services continues to decline thanks to the big banks’ ruthless culling of ATMs and branches. The number of free-to-use cash machines has dropped to 39,429, the lowest number since 2008. This year alone 242 branches are scheduled to close. That’s on top of the 5,162 bank and building society branches that have closed since January 2015.

On March 20, the UK Parliament’s Petitions Committee held a debate on the proposals raised by the two petitions on cash use (link to video, link to full transcript), which threw up some interesting comments:

Martyn Day, SNP MP for Linlithgow and East Falkirk, on freedom of choice:

Zachary Stiling, creator of the more recent petition, told me:

“We must protect the individual’s right to use cash in all physical transactions. While there are many obvious advantages to digital payments, it is not suitable at all times or for all people…There are dangerous political implications with going cashless, as instances of banks and financial service providers closing accounts for political reasons are not unprecedented and are clearly at odds with liberal society’s cornerstone of freedom of belief.”

As we have heard from a number of interventions, freedom of choice is a central tenet of this issue. To be clear, the choice to use cash is still one that many people wish to make. Indeed, 95% of respondents to the Petitions Committee survey ahead of this debate stated that they preferred to use cash to pay for things over other means of payment. I know from my own experience that I would be happier using cash when I am in a pub or a restaurant than when I am shopping. It is different horses for different courses.

Figures from the Royal Society for the Encouragement of Arts, Manufactures and Commerce 2022 cash census showed that 96% of people withdraw cash at some frequency, with 83% having cash either in their wallet or at home…

[The access to cash review] highlighted that “poverty is the biggest indicator of cash dependency”.

Dependence on cash is closely tied to barriers to digital connectivity — for example, for those living in rural areas and those with low or no digital engagement. In its 2022 policy briefing on the subject, Age Scotland raised the importance of cash for older people. It highlighted that many on low or fixed incomes prefer to use cash to budget.

Duncan Baker (Conservative MP for North Norfolk) on the “madness” of bank closures straight after lockdowns:

In 2021, 736 bank branches closed throughout the UK. From my constituency, I remember some of the closures proposed by Barclays. The reason for closing was that the research indicated a drop in footfall. I said to the bank team that presented the findings, “We have had lockdown; consumers have not been able to go to the bank. You cannot possibly use a drop off in footfall as an excuse to shut a bank branch when the public have been prohibited from even accessing our towns and villages.” It was absolute madness.

Paul Maynard (Conservative MP for Blackpool North and Cleverleys and lobbyist for national ATM network provider Link) on the cost of maintaining cash infrastructure:

This debate is not really about acceptance of cash; that is a misnomer. It is about who pays for our cash system. Is it businesses? Retailers do not get to keep every penny if people pay by cash, and the extra costs associated with handling cash and with the cash system are passed on to consumers. The financial services sector —everyone boos it quite happily—passes the cost on to account holders. Fundamentally, the cost of our cash system always ends up back with the customer. Tinkering with the intermediaries handling the cash and introducing new rules, as some have advocated today, will not change that fact, even if it makes for some media-friendly, savvy headlines in the Daily Mail.

Nick here: according to Maynard, maintaining the cash network costs around 5 billion pounds per year, which may seem like a reasonably large sum of money even by today’s standards. But it pales in comparison with the untold billions paid by businesses and consumers in card processing fees to banks and card companies like Visa and Mastercard. Mastercard alone is facing a £14 billion class action suit for imposing illegal card charges between 1992 and 2008 that were ultimately borne by UK consumers.

Lastly, Economic Secretary to the UK Treasury Andrew Griffith offered the government’s response (emphasis my own):

Cash acceptance is an emerging issue that we contemplate for the future, but it is not a prevalent issue today, other than when people conflate it with the loss of bank branches. That is understandable, but we are seeing very rapid changes in society. I am clear that it is not the Government’s position — I think this is also true of the Labour party and, probably, the Scottish Executive — that we will mandate cash acceptance on retailers or public services

It is important to have the flexibility to respond to changes in the market. What we are doing in the Financial Services and Markets Bill should not be underestimated. As I said, for the first time in law we are protecting the ability of people and businesses — businesses are in scope as well — to deposit as well as accept banknotes and coins. The Government’s position is that it is much better that we will the means to enable businesses to continue to take cash, rather than simply will the ends without addressing any of the means, as some would do.

In other words, let the market decide. And it seems that the market would like nothing more than to let (or rather, help) cash die a slow, quiet death. In other words, if British people actually want cash to stick around, they will have to take matters into their own hands, as Spanish pensioners did in early 2022. Sick and tired of bearing the brunt of the banks’ years-long war on cash, senior citizens used the latest communications technologies (oh, the irony) to call for a nationwide one-day strike in favor of cash payments. That was enough to make the banks — and the government — sit up and listen.


* With the UK registering inflation of above 5% every month since late 2021 and above 10% every month since October 2022, people are clearly not turning to cash as a store of value. Rather, they are holding money outside of the banks, probably because they don’t fully trust the banking system anymore. This is a trend that has occurred with many other currencies, including euros and dollars.

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  1. The Rev Kev

    Here in Oz the war on cash is ongoing. One of the four big banks announced that they will have branches which won’t carry cash so you can’t actually withdraw any from those branches. Instead, those customers will be told to get money from the banks ATMs on the outside-

    And at the same time, the banks are also reducing the number of ATMs across the country making it harder to get money across the country. If you are an older person or the nearest bank is a coupla dozen miles away, then you are all out of luck-

    My guess is that they want to do away with banks and ATMs so in the end, you will be forced to use an app on your mobile to make any payments and the like which should be OK because we all know how secure mobiles are in terms of computer security.

  2. Regis II

    I’ve given some thought to this subject, but in the American context.

    AFAIK, the Federal Reserve’s position is that a point of sale transaction (e.g. buying a cup of coffee and a donut at Dunkin’ Donuts) does not create a private debt, meaning that the legal tender law does not apply.

    This, IMO, leaves an opening for state or even local U.S. governments to issue what would otherwise be unlawful bills of credit. The local law would be that all businesses are required to accept the state issued scrip for point of sale transactions. And the state would also accept that scrip in payment of all debts due to the state and would require all local governments to accept it in payment of amounts due them.

    The scrip would be issued as iou’s to persons doing business with the state and receiving cash assistance from the state.

    This could even be done (at the moment at any rate) through a state owned and operated bank, since the Civil War era tax on non-Federal Reserve issued bank notes was repealed about 30 years ago.

    1. Mike

      Welcome idea, as it looks like you’ve been reading Ellen Brown. The only caveat to me is that the states themselves would need to be reformed so that vulture capitalists and speculators (I’m speaking of you, real estate swingers) could be tightly controlled. Otherwise, I fear, the landed gentry would seek and obtain favor.

  3. Tony Wright

    Good on the Spaniards for both the people’s actions and the Govt.’s response.
    Brits should follow their example and if a retailer refuses cash – TIFI, and take your business to a competitor. Then follow the Spanish example and advertise the name of cash recalcitrant businesses on relevent social media so as to warn others.

  4. jackiebass63

    If I was purchasing something and they didn’t accept cash as payment, I would go els ware to make the purchase. I believe in the Us cash is legal tender for all debts public and private. I usually pay with a charge card because it gives me cash back.

  5. Divadab

    I opened a bank account for a cooperative at a regional bank and was surprised to see that they charged a fee to accept cash deposits. Not an issue for the coop but we moved our business to a credit union which did not so charge. Wondering if others have seen this disturbing trend?

    My suspicion is that the bank, conservatively-owned and private, did not want to deal with cash businesses- particularly State-legal cannabis businesses, which were not able to accept other than cash due to federal regulations. But this is unconfirmed – but it seems to me to be a bad trend.

  6. Tony Wright

    A variety of US financial newsletter writers have opined over recent weeks that the US Fed is going to use the escalating bank crisis as psychological leverage to introduce a central bank digital dollar, mandating digital only transactions and the death of cash – following the Rahm Emmanuel mantra of not letting a good crisis go to waste.
    Welcome to state surveillance of all finances, plus the ability to tax any transaction and impose inescapable negative interest rates. Woopy Doo.

  7. Richard Kirby

    I went to the Oval Cricket Ground in London a few years ago, and it was all card-only. All the bars, food outlets and souvenir shops. I popped out to the local supermarket to get food and drink.

    Parking meters in my city are trending towards being mobile phone only. Great if you have a mobile phone.

    My local butcher ONLY takes cash, whereas a nearby Bagel shop is card-only – I sent them an email complaining about that, and have given them no business.

    If I need a taxi, I only use the Black Cabs, and pay in cash.

    I am really puzzled why shopowners want to refuse cash. Ok, staff are generally required to have a bank account for their salaries, but if you don’t need to bank the cash, and can use it daily for your own business needs, then it costs you nothing, as opposed to the card tax they have to pay for the privilege of accepting customers using cards.

    1. Divadab

      Yup – that’s your leverage- don’t buy from people who won’t take cash. Handling cash is a cost of doing business- it’s dirty stuff, subject to pilferage, and it takes time to process. But I used to run the money room for a bingo and it would have been out of business if we stopped taking cash, and paying prizes in cash.

      My basic rule is I use cash for small businesses and credit card for corporate businesses.

    2. EquitableEqual

      In most industries, the retailer’s suppliers need to be paid by bank transfer rather than cash, and in many cases, point of sale systems (e.g. ePOSnow) are integrated with SME accounting software (e.g. Sage) to automate reconciliation, tax calculation and margins. If a shop is cashless only, it can avoid trips to the bank and manual bookkeeping, and only pay an accountant for a few hours per quarter.

  8. flora

    Thanks for this. In the US there’s an attempt to slip in changes to the definition of currency in the states’ Universal Commercial Code (UCC) this year to include Central Bank Digital Currency (CBDC). Each state can accept or reject the change to its UCC law. (The big banks and cc lobbyists are pushing this change.) I think 20 states so far are pushing back on the change to their state UCC law, including South Dakota and Missouri. I hope more states, all states will refuse to change the definition of currency in their UCC law.

  9. Sausage Factory

    The Britrish Government are certainly the most intent on controlling their population, a population which is incredibly compliant and weak after 3 years of covid repression, strike whilst the iron is hot is the Tory/Security States MO. Corral the sheep whilst they are amenable, the wolves disguise their motives under a pall of ‘protective and preventative’ propaganda. If you look at the UKs economy it is in an appalling state, well over $3 trillion of debt on what, in reality, is around a $2 trillion GDP whilst also holding massive amounts of US debt (£655 billion – the third highest holders after Japan $1.1 trillion & China $880 billion – will they have the balls to start dumping it as the dollar turns into a massive liability itself?)
    It has financial commitments going forward of over 1200% times its GDP. The UK is a basket case beyond imagination. In order to survive the ‘establishment’ must have their own people meek, cowed and pliable, a CBDC is just the ticket. With retirement age heading towards 70 and seemingly no groundswell of resistance a la France, feudalism never left the English.

  10. JBird4049

    Every single time I read about efforts to eliminate cash, I remember when credit and debit cards were unusable because of a breakdown of the system as has happened after a major earthquake. Then there are the millions of unbanked people who are like the homeless; invisible and their situation is often not their fault in anyway. When you add the truly vast area that is the United States, which still has areas of extremely problematic telephone and internet service, and you just how unwise pushing digital cash onto the public.

    However, the top 20% will almost never have to worry for even if internet and phone were to stop due to some disaster, it will quickly be repaired; unlike Puerto Rico or some deeply red areas, both isolated and full of poor people, that even California, they will always get first dibs on the repair crews.

    I was going to add a comment about how some people are seemingly unaware of the situation is in much of the country and how large it is; I realize that they do not know and would not care even if they did. The wealthier you are, the more insulated you are from reality as well as uncaring about the disposables.

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