Will coronavirus be the death of cash?

The crisis has forced us to change our spending habits, but keeping cash machines full remains vital

Kenza Bryan –  The Times

 The use of cash has halved in the past week, as customers switch to shopping online and abandon coins and notes over hygiene fears.

The World Health Organisation has said that handling cash does not pose more of a health risk than touching any other surface, but campaigners believe that the coronavirus crisis will change our habits, leading to a sharp reduction in the use and availability of cash even after the danger of getting ill recedes.

Before most businesses shut down, “card only” signs were popping up in pubs and shops all over the UK. Chains including Costa Coffee, which has 2,500 stores, had stopped accepting cash.

Many shoppers have also rejected card payments in favour of Google and Apple Pay transactions on mobile phones. The limit on contactless transactions will increase from £30 to £45 next month in recognition of fears about how physical payment methods could increase the rate of viral transmission.

Keeping the nation in cash at a time of crisis is a challenge, particularly in smaller, remote communities where cash use is still high.

Natalie Ceeney is the head of the Access to Cash campaign, which is pushing for banks to be made legally responsible for ensuring that customers can take cash out even if they live in remote locations. “The people who need and use cash most are generally the most vulnerable: the old, but also the poor,” she says. “I know some shops are nervous about handling notes, but they should be careful about refusing cash because some people will depend on it. The reality is that handling anything is a risk, whether it’s a plastic bag or a piece of paper.”

She believes that up to 30 per cent of the UK population could move away from cash payments to card payments because of coronavirus, first temporarily and then as a permanent habit, in a “dramatic shift to digital”.

About 1.3 million adults in the UK do not have this option because they have no bank account, according to the Financial Conduct Authority. Others have limited access to the internet, live in areas where few shops are equipped to accept card payments, or have tight budgets, which are easier to manage using cash. These people are likely to struggle if there is a shortage of cash or of businesses who accept it.

Sherwood Fired, a pizza van in Mansfield, Nottinghamshire, is one of the many businesses that stopped accepting cash in response to the pandemic. In a normal week the owner, David Finn, sells 500 pizzas for £6 to £9 each.

Until two weeks ago half of all his sales were in cash. Now, he thinks the vast majority of his customers will continue to pay by card once the coronavirus threat has disappeared.

He says: “Once people get the idea that money can be a bit dirty and can be infectious, that idea will stick and they will avoid it.”

Finn, 32, shut down his van when the prime minister ordered all restaurants to close, and is now working on setting up a delivery business. He is operating a buy-one-get-one-free deal for NHS staff. Moving to digital payments has had a cost. He pays 1.75 per cent of each transaction to the payment company iZettle, but says that the fee is worth it to avoid losing customers who wish to pay by card.

Gareth Shaw, head of money at the consumer group Which?, says: “It’s understandable that some shops may ask customers for card-only payments to reduce the risk of transmitting coronavirus, but we are concerned that this will leave many vulnerable people unable to pay for the basics they need.

“The government and retailers need to find a way to ensure that the millions of people who rely on cash, and may not have a bank card, can still pay for essentials during this difficult time.”

Peter McNamara, the founder of the ATM operator Note Machine, says that the number of withdrawals at its cash machines halved last week, but the average value of transactions increased from £62 at the start of the month to £74 last week.

Note Machine runs more than 11,000 cash machines and distributes roughly £1 in every £5 in circulation. McNamara says: “The availability of cash is critical if you’re going to keep people able to buy food and groceries.”

McNamara says that in the worst-case scenario, if half of his workforce had to go into isolation, Note Machine would only be able to fill half of its cash machines at any one time. Cash handlers are classed as key workers.

McNamara estimates that 80 per cent of all withdrawals would still be successful, and last week Note Machine dispensed £310 million across its more than 11,000 cash dispensers.

Andy Cox is responsible for the stocking of 2,500 Note Machine ATMs in Manchester, Liverpool, Birmingham, Newcastle and Carlisle.

Cox, 32, has a list of high-priority cash machines that are vulnerable to running out of cash and has reinforced measures to keep his staff healthy and on the road. “You can’t stop the flow of cash,” he says.

“Our biggest fear is losing staff to poor hygiene, so gloves have been made mandatory and the lads all have hand sanitiser.”

All 66 drivers, security guards and IT staff who work for Cox are defined as key financial service workers whose work is crucial to keeping the economy going during the coronavirus lockdown.

Cox’s 11-year-old stepson, Leon, has to continue going to school, alongside the children of doctors, supermarket staff and local government workers. Needless to say, Leon is not thrilled.


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