Writer Dave Wallace wrote an interesting article in the July/August edition of Fintech Futures magazine; and we’re happy to share it here, in edited form, for those who aren’t subscribers*.
The other day, I spotted a rare creature in the wild – a new £50 note.
I was standing at a bar, and the person next to me, who I knew, was trying to pay for a drink with this elusive and not-oft-seen denomination.
There was a bit of toing and froing between said individual and the bar staff. Eventually, they said that the bar was card only. The person turned to me and said: “That’s strange. They accepted cash earlier on in the evening.” And as they didn’t have a card or phone, I ended up paying for the round…
We discussed what had occurred and concluded that the bar had a policy of not accepting £50 notes. We speculated that this might be due to the potential for fraud due to the attraction of counterfeiting larger denominations. We also chatted about perceptions of the origins of large denominations and the stigma attached to them – in essence, people being paid for services in cash to avoid tax.
This interaction reminded me that although I may live in a cashless world, many people rely on physical money and are increasingly penalised for doing so.
SO WHAT ARE THE FACTS?
Link, the ATM network, has just published an update to its Access to Cash Review, which it first undertook five years ago. They interviewed more than 2 000 people. Key highlights include:
- Nearly half the UK population believes the country is moving towards a cashless society. This despite concerns about such a move.
- The number of people who do not carry cash has tripled since 2019, though most carry small amounts as a backup in case they cannot pay by card.
- Daily cash withdrawals from ATMs are 33% down from 2019.
- 48% of people find the idea of a cashless society problematic, slightly up from 2019; and 39% do not find it problematic, an increase of 6% from 2019.
Despite the overall downward trend in cash usage, a lot of cash is still being withdrawn and used in circulation [Ed: as in South Africa, where whole segments of our population are cash-based].
Many banks have been closing branches, especially in rural areas, reducing access to essential cash services for small businesses.
SMEB, a company identifying this issue, aims to fill the gap by providing a self-service banking kiosk, or “cube”, positioned in secure, high-footfall locations like shopping centres and community markets where there is existing CCTV coverage. These kiosks provide private areas for cash transactions, ensuring security and privacy for users. It focuses on bricks-and-mortar businesses such as butchers, bakers, restaurants and hairdressers, which are traditionally cash-heavy.
Security is a primary focus, given the nature of cash transactions. SMEB performs rigorous know your customer (KYC) and anti-money laundering (AML) checks to manage risk, setting credit limits based on a business’s financial history and turnover.
At the start of my career, I looked after a few kiosks that Yellow Pages had scattered around Southeast England. They offered access to Yellow Pages information through an interactive interface. After that experience, if you had told me that banking kiosks would be a new banking innovation 30 years in the future, I would have raised an eyebrow. However, this is an excellent example of the changing face of banking and banking channels, giving rise to innovations using old-school technology and linking it with a new app-based approach to solve a real-world need.
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