Bank of England issues update on future of cash use in UK
The Government has announced that the Bank of England will monitor cash acceptance closely, following concerns about the fate of physical currency highlighted in a Treasury Committee report. It's understood that the Bank pledged to maintain an extra question on cash acceptance in its consumer surveys, which were first introduced in January.
The official response detailed: "The Bank of England regularly collects data on consumers' payment preferences, including the consumer experience of cash acceptance. In January, the Bank of England expanded this data collection with a new question seeking to understand the impact of a business refusing cash on individuals.
"Where consumers did encounter a cash free store, 8% had to go to a different store to complete their purchase and 6% did not purchase the item they wanted at all.
"The Bank of England has committed to continuing to include this additional question on cash acceptance in its surveys of consumers, allowing the Government another avenue to monitor cash acceptance levels and the impact of cash acceptance on an ongoing basis, alongside data from industry."
The committee's report underscored the fact that UK businesses and organisations are legally permitted to reject cash payments without any obligation to meet customers' diverse needs.
Witnesses noted that public transport and infrastructure for motorists are areas where cash acceptance has declined. Charities and consumers also informed the committee that local government and services funded by local authorities are becoming more cashless.
The report published earlier this year cautioned that failing to tackle the decline in cash acceptance could risk creating a two-tier society with the most vulnerable bearing the cost. Particularly at risk are groups such as those with learning disabilities, survivors of domestic abuse and older people.
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MPs are now being called upon to improve monitoring. In January, Economic Secretary to the Treasury Emma Reynolds told a Treasury Committee hearing that the Government had 'no plans' to regulate businesses to compel them to accept cash – big or small.
However, the committee's report argued that the Treasury may eventually need to mandate cash acceptance if those who rely on physical cash are not adequately supported.
Treasury Committee chairwoman Dame Meg Hillier said: "The commitment from the Bank of England to continue monitoring cash acceptance is a positive first step but given the Government agree with our views in the main, we expect to see further positive measures on protecting the most vulnerable when they publish their Financial Inclusion Strategy."
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