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MPs on the Treasury Select Committee are calling for evidence to determine whether new rules are needed to make accepting cash mandatory across Britain.
There are currently no regulations forcing businesses – from shops to restaurants – to accept cash and the tests will be used to establish the current status of its acceptance in Britain.
It will look at whether businesses should always accept physical cash and how much it would cost.
Cash usage has declined over the past decade, as people primarily turn to contactless card payments.
King Cash? MPs call for evidence on whether accepting cash should be mandatory
The Treasury Select Committee said cash remains a “vital resource for many”.
“Research indicates that using cash can provide a vital lifeline for groups such as those with poor long-term health or people at risk of financial abuse,” he added.
Around 3.1 million people in the UK rely almost exclusively on cash as a form of payment, data from non-profit company Cash Access UK reveals.
Around 1.5 million adults used cash as their main spending method last year, according to UK Finance, the first increase since 2019.
He says this can be attributed to the cost of living crisis, as more and more people choose cash for budgeting.
Only 900,000 used coins and bills as their main spending method in 2022.
Overall, cash use fell last year to account for 12 per cent of all payments, and UK Finance said 22 million adults are “mainly cashless”.
The decline in cash usage is increasing infrastructure costs to retain physical cash as a viable payment method, which could lead to disruption for businesses and consumers, according to the Bank of England.
Others have highlighted the dangers of over-reliance on digital payments, suggesting that accepting cash should be seen as a form of civil preparedness.
There are currently no regulations requiring businesses to accept cash.
Adrian Roberts, chief executive of Link, told This is Money: ‘Our data consistently shows that people who rely on cash live in the most deprived areas of the country. But what’s more, they are also more likely to be digitally excluded.’
In June this year, the Government gave the FCA new powers to ensure reasonable access to cash withdrawals and deposits.
Under the rules, banks and building societies have to consider whether local communities lack access to cash services, such as branches and ATMs, and provide additional services where they find “significant gaps”.
The deadline to submit evidence to the Treasury Select Committee is December 2 at 5 p.m.
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