How often do you use cash? Millions still depend on it, says JOHN HOWELLS

The use of cash has decreased dramatically in recent years. Many people now prefer the ease of banking online and using contactless payments.

But there are still many people who still rely on cash. In fact, rLink’s research suggests that five million continue to respond in cash day after day.

John Howells is the chief executive of Link, Britain’s largest ATM network.

Here, he shares why securing the future of physical money and helping people better transition to a digital world will be key for the next government.

How often do you use cash? Is it less frequent than before or more?

As CEO of Link, I am acutely aware that fewer and fewer people are using cash.

They are choosing to use options that best suit them, because many people can now bank online, pay contactless and check their balance with the swipe of a finger.

But our research suggests there are still five million people who rely on cash day in and day out.

They most likely live on a tight budget and use cash to make sure they make ends meet. We cannot afford to leave those people behind.

Before the last election in 2019, Link funded vital research warning that the UK was sleepwalking towards a cashless society.

The Cash Access Review, independently led by Natalie Ceeney CBE, called for swift action to protect the most vulnerable in society from the rapid shift to digital.

At that time, only four in 100 people told us they never carry cash.

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Since 2019, people have voted with their feet and chosen the convenience of contactless payments or online shopping. Today, 14 percent of people say they never carry cash.

Even those who do carry cash are less likely than before to pay cash for everyday items. That’s why Link ATMs issue £100 million less each day to consumers compared to a short time ago.

The trend only goes in one direction. UK Finance predicts that only 7 per cent of payments will be made in cash by 2032.

But not everyone can use a mobile banking app.

Not everyone can budget with contactless payments that could leave your account today or next week.

Not everyone trusts the security of digital payments.

Since 2019, Link has taken decisive action to protect access to cash across the country.

We have financed thousands of machines in areas that could otherwise be cash deserts and have recommended new banking centers in every part of the country.

Through this work, we have ensured that the same proportion of people live within 1km of free access to cash as before, despite the total number of machines being reduced.

We were delighted to see the Government back that work in law last year.

But with an election looming, it’s right to ask what the next Parliament means for access to cash.

Looking ahead to the end of the decade, it is clear that the use of cash will become less and less common.

The protections set out in the Financial Services and Markets Act 2023 will ensure that despite the decline in usage, people can still access cash conveniently.

We are pleased that all the main parties have identified the role that banking centers also play on the high street.

But the next government will want to think creatively about the future of payments.

The current Treasury Policy Statement does not specify the need for face-to-face services in centres, but they are a popular part of the service providing a crucial contact point for people on their high streets.

The nascent National Payments Vision does not yet set out a clear route for the UK to maintain its status as a global payments leader.

And there is still no coherent plan to prepare people for the digital world.

If bold action is not taken, within five years customers could face significant exclusion if they rely on cash.

Cash users are already missing out on some of the best deals if they’re not online.

Five years from now, if it becomes necessary to use a special counter to pay for cash purchases because there are no longer many staffed cash registers, life could be difficult for some of society’s most vulnerable people.

But there’s no reason it has to work that way.

If we want a world where everyone can continue to choose how to pay, we must ensure the transition to digital is fair.

That means protecting access to cash for as long as people want it, but also giving them the tools they need to use other payment methods.

Whether through a comprehensive approach to digital inclusion or by designing universal digital banking services, the next Government has a key role to play.

LINK has been working with local partners in Wales, Devon and Northern Ireland to explore how local communities can upskill people with the basic digital skills they need to thrive as the world becomes less analogue and more digital. We are helping to teach the basics of email and the “Internet.”

For many, digital wallets and open banking are part of a new and unpleasant foreign language.

We have seen that people need support in their communities from people they trust and understand.

The truth, however, is that this requires a concerted national energy directed at this, rather than a patchwork of local solutions.

At first, I asked him about his cash habits. Whether you’re not using cash at all, less than before, or you still pull out your wallet and use cash at every opportunity, you can still rely on a strong cash access network.

If digital systems fail, cash is the only alternative. That’s just one of the reasons we will continue to protect access to cash for as long as it is necessary.

But it would be short-sighted to focus solely on protecting cash, when we need to prepare for a digital future that works for everyone, all the time.