‘Cash crash’: One in three people blocked from paying with notes and coins during pandemic

More than a third of consumers have been blocked from paying with cash during the coronavirus pandemic as shops switch to electronic payments only, according to Which?

Grocery shopping accounted for 28 per cent of incidents where banknotes and coins were refused, the survey of more than 2,000 people found.

The consumer group highlighted one concerning incident involving a diabetic man in urgent need of food after his blood sugar levels had dropped. The man, who had stopped off at a service station after getting stuck in traffic, was eventually able to pay in cash at a KFC after being denied in two other restaurants. 

Another survey respondent said they were not allowed to board a bus because they only had cash, even though their ankle was broken and in a cast.  

One in 20 people polled said they rely on cash and one in seven said they would struggle without it. Two-fifths view cash as an essential backup.

Recent research from the Bank of England suggests the risks of catching coronavirus from banknotes is low.

Which? said given the low level of risk, combined with the significant number of people who still rely on cash, it is encouraging shops to continue to accept it.

The consumer group is working with retailers to develop an initiative to protect consumers who want or need to continue shopping with cash.

It is also calling for the Financial Conduct Authority (FCA) to be made responsible for tracking the number of UK businesses accepting cash and assessing the rate at which this is changing.

Jenny Ross, Which? Money editor, said: “We have repeatedly warned about the consequences that coronavirus will have on what was an already fragile cash system, but nowhere near enough action has been taken by the government or the regulator to understand the scale of this issue.

“The government, which is still yet to introduce legislation to protect cash it promised almost a year ago, must urgently make the FCA responsible for tracking cash acceptance levels. Failure to do so will see the cash network crumble and leave millions of people abandoned.”

John Howells, chief executive of ATM network Link, said: “We agree with Which?'s call for even faster progress on the government’s welcome commitment to legislate to protect cash. It is clear that acceptance as well as access needs to be dealt with too.

“Cash usage will have halved by the end 2021 compared to the start of the pandemic (according to Link’s forecasts) and the infrastructure needs reforming if it is to cope with that sort of major decline in a way that doesn’t harm consumers.”

Natalie Ceeney, who chaired the Access to Cash Review, said: “The figures show that it’s not simply the odd coffee shop going cashless, but this is creeping into the wider economy.”

She added: “And we can’t just blame individual businesses – many are going cashless because they can’t easily bank cash takings because their local branch is closed or some distance away. The government needs to urgently legislate to protect the viability of cash – as it promised to do so last year. Time is running out.”

Additional reporting by PA