‘Cash Crash’: How Covid is killing off real money

Which? survey Cash Crisis - covid killing off real money
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A survey conducted by the respected consumer champion Which? Illustrates the parlous state of cash and why the high street gambling entertainment sector must be able to offer a choice of payment methods in order to remain relevant.

 

The need for the retail gambling sector to be allowed to offer its customers a choice of payment methods in line with the rest of the high street has been put into sharp relief following a Which? report detailing what it describes as a ‘cash crash’ with one in three blocked from paying with notes and coins during the course of the pandemic.

A survey of 2,000 people conducted by the consumer champion showed 34 percent reported being blocked from paying with cash at least once when trying to buy something in the last 11-months with pubs and restaurants the second most common sector to impose the restriction accounting for 24 percent of respondents. Respondents were most likely to be refused the option of paying in cash when shopping for groceries, which accounted for 28 percent of incidents.

Which? is calling for urgent action to protect the millions of people who depend on the critically endangered cash network.

Five per cent of respondents said they rely on cash, which equates to more than two and a half million people in the UK. 13 per cent, equivalent to seven million people, also said they would struggle without it.

Furthermore, 40 per cent, representing 22 million people, said that they viewed cash as an essential backup.

The survey also highlighted how rapidly the coronavirus outbreak has changed the way many people pay. More than half (53 percent) of people said they had replaced some or all of their cash use since the first lockdown. Of these, just under half (46 percent) said that their declining cash use was as a result of shops prohibiting or discouraging it. According to Bank of England figures less than a quarter of all payments in 2019 were made using cash, down from 60 percent a decade earlier. The pandemic has accelerated the decline with year-on-year cash machine use 60 percent lower in April 2020.

Two in five shoppers (42 percent) told Which? they were using less cash because they thought card payments were safer, a notion that prompted some businesses to encourage contactless payments or go entirely cash free in response to the pandemic. This approach was first taken at the start of the pandemic, when there were mixed messages about the safety of cash, but since then the Bank of England has provided clarity on the issue.

It advised during the first lockdown that the risk from banknotes is ‘no greater than touching any other common surface, such as handrails doorknobs or credit cards’, and in November concluded that ‘any risk from handling cash should be low,’ particularly compared with ‘high-touch’ objects such as shopping baskets, self-checkout touchscreens or products for sale.

Biologists have said that Coronavirus is highly unlikely to be spread by handling notes and coins. Dr Christine Tait-Burkard an infection and immunity expert and fellow at the University of Edinburgh, said retailers should not be blocking cash purchases on safety grounds, confirming that wearing masks in retail environments had reduced the risk, as there was no opportunity for shoppers to touch cash and then their mouth or nose.

Jenny Ross, of Which? said: “Cash is still a vital way to pay for millions of consumers, so to see such a high proportion of people report that they have had difficulty spending it is very concerning, particularly now we have entered another lockdown.

“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.”

Which? surveyed 2,004 UK adults between 13th and 17th November 2020. Fieldwork was carried out online by Opinium and data have been weighted to be representative of the UK population (aged 18+).

9 IN 10 CARD PAYMENTS WERE CONTACTLESS IN 2020

90 per cent of face-to-face UK card transactions made in-store are now contactless according to data from Barclaycard. The value of contactless transactions using Barclays debit and credit cards grew by 7 percent in 2020. Barclaycard research showed the average value of contactless payments increasing by 29 percent. The average contactless user made a total of 141 payments in 2020 worth £1,640. The biggest increase in usage was among the over-65s which was up by 12 percent, year-on0year. Raheel Ahmed, head of consumer products at Barclaycard said: “We believe that contactless is the safer, faster and most responsible way to pay in store, and we encourage all consumers to take advantage of it wherever possible.”

 

What the industry says…

 

SASCHA BLODAU, GENERAL MANAGER, GAUSELMANN (UK)

“The report that’s been produced by Which? chimes with our own position on the need to be able to provide our customers with a range of payment methods in addition to cash, which we recognise is still extremely important to a significant proportion of the population.

Looking ahead, the low stake gambling entertainment sector must be able to offer the breadth of consumer choice found elsewhere on the high street and we are delighted to note that alternative payment methods are part of the call for evidence in the government’s review of gambling.

Our sector is one of the very few parts of the economy that’s currently restricted from accepting cashless payments which not only narrows customer choice but also limits the retail sector’s ability to compete with online. The review of gambling is a once in a generation opportunity to modernise the way our industry is regulated and alternative payment methods must be near the top if not at the top of the agenda to modernise.”

PAUL TERRONI DIRECTOR, STRATEGY AND BUSINESS DEVELOPMENT, NOVOMATIC UK LIMITED

“This survey highlights the worrying position the land based sector finds itself in as the only part of the UK economy that cannot offer its customers the range of modern methods to pay for games in the way they wish. Gambling like other forms of leisure and retail needs to keep pace with what consumers want, expect, and what has evidently become the norm.

We are en-route to becoming a cashless society and we face being the only business being left behind as legislation currently prevents us being able to offer a full range of payment options to our customers. We are pleased that the Gambling Review acknowledges the impact this situation is having on our sector and hope that we will soon be able to keep pace with consumer demands.”

JOHN WHITE CEO BACTA

“The increased swerve away from cash is in part because notes and coins are covered in germs and part because shops have been shut. But above all cash use is cumbersome and inconvenient compared to modern cashless forms of payment.

Whilst reduced cash is good for our sector for many additional reasons like security and cash handling costs, at the end of the day the key point is that we have to provide customers the full range of payment methods from cash to cashless, and as the Which Report shows, many want cashless now. This is why Bacta developed the GPT Game Payment App for the industry whilst we continue to seek further customer payment opportunities via the current Gambling Review.”

PETER HANNIBAL, CEO, THE GAMBLING BUSINESS GROUP

“The case for adapting regulations in order to dovetail with changing consumer behaviours – in this case the ability to provide players with a range of payment methods – has been well made over recent years and is now indisputable. It goes without saying that as we modernise in areas such as payment methods, we also need to enhance and improve the player protections that sit around them.

“The ‘cashless’ questions are contained within the DCMS’s call for evidence in the current Review of the Gambling Act 2005 and the Gambling Business Group is working closely with other machine operating sectors towards a response that will provide Government with the necessary confidence to enable cashless transactions.

“The industry needs to evaluate the merits of e-wallets, which can be used now, without the need for changes in legislation, versus the ability to place electronic cash directly on and off machines. The second option will require the removal of the current prohibition of debit card use direct with machines as an outcome of the current review.”

ROBERT GIBB, GAME PAYMENT TECHNOLOGY

“It is understandable that in the current Covid-19 climate both business and the public are looking at, or adopting alternative payment methods to cash. Clearly the movement from cash as a medium of payment to cards or e-wallets has accelerated dramatically in 2020. The main issue here should be about allowing the customer to choose which payment method they feel most comfortable with whether that be a card or an app that allows them to monitor and control their spend such as the bacta GPT app. We have already seen the use of apps becoming increasingly part of our daily life whether it be paying for our parking or buying a coffee and I suspect that this is only going to continue.”

 


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