Banks and Corporations Feeding ‘False Narrative’ That Consumers Are Driving Cashless Society: Expert

Undated file photo showing a customer making a contactless card payment. (Barclaycard/PA Media)

The author of a new book has warned of a “false narrative” being peddled by UK corporations and banks, and being supported by politicians, that the drive towards a cashless society is being driven by consumers and is an inevitable sign of technological progress.

Brett Scott, a former finance industry worker who has written “Cloudmoney: Cash, Cards, Crypto and the War for our Wallets,” said the banks and Big Tech companies have framed a narrative in which cash is the “horsecart” of payments, which will inevitably be replaced by the “car,” represented by digital payments.

But he said digital payments were being mis-sold as an “upgrade” to cash and he said a better analogy would be to think of cash as the “bicycle;” a healthier alternative to the car and a counter-power to the digital system, which is more prone to corporate or political manipulation and technological failure.

Despite the drive towards a cashless society, the Bank of England’s own website says there are £82 billion ($93 billion) worth of banknotes in circulation—twice the amount there was a decade ago.

It said, “Large sums are also likely to be held overseas or for illegal uses: the so-called ‘shadow’ economy.”

The Bank of England has reminded people who still have paper £20 and £50 notes they only have until Sept. 30 to use them, before they are replaced by polymer notes and are no longer legal tender.

UK Finance, the banking industry body, said cash transactions fell from 56 percent of all payments in 2010, to just 17 percent in 2020 (pdf) and a recent study from Juniper Research predicted the value of contactless payment transactions will reach $10 trillion globally by 2027, up from $4.6 trillion this year.

Natalie Ceeney, chair of the Cash Action Group, said the pandemic had only accelerated a trend which was already well under way.

‘You Can’t Pull the Plug on Cash Until Everyone Can use Digital’

But she told The Epoch Times: “You can’t pull the plug on cash until everyone can use digital. Your ability to operate in society is dependent on your ability to pay for things.”

Ceeney said: “Who needs cash? Obviously the elderly and people not using digital are key, but also those in poverty. Cash is the best way to budget.”

In 2019 she published the Access to Cash review.

Ceeney said: “We worked for a year on it and looked at countries like Sweden and China which have gone further along the cashless journey. We found that the commercial infrastructure which supports cash was falling apart and leaving holes. We were sleepwalking into a cashless society.”

In 2020 the then-Chancellor of the Exchequer, Rishi Sunak, promised to legislate to protect access to cash.

A selection of UK bank notes and pound coins, in an undated file photo. (Dominic Lipinski/PA)

Then in May this year the Financial Services and Markets Bill (pdf) was introduced in the Queen’s Speech, which included a duty for the Treasury to publish a “cash access policy” and keep it under regular review.

Sunak said he recognised that many people did not use digital payments and still needed to access cash.

But Scott said: “The way Rishi Sunak and [Prime Minister] Liz Truss frame the narrative is that cash is the horsecart, but there are still many people who use the horsecart and we need to give them more time. But they buy into the overall ideology and are just urging a slower transition.

“They are not challenging the overall narrative. A true pro-cash narrative is that it’s the bicycle and it’s better. It is not a matter of biding for time but trying to create a counter-power to digital.”

‘Cash Is a Data-Blocker’

Scott said the banks, corporations, and Big Tech firms like Amazon all supported the drive to a cashless society because digital produces both fees and valuable data about what each consumer spends their money on. He added: “Cash is a data-blocker. These big players don’t like it because they risk losing fees and data.”

“Cash will prevent corporate domination and maintain our autonomy,” he said, although he added that he was not a “conspiracy theorist” who believes Big Tech bosses are in league with global governments to rid the world of cash.

In Britain, the Cash Action Group, which includes 10 big banks, as well as consumer groups and small businesses, has invented banking hubs—a single venue where people can do their banking in communities where all the individual bank branches have closed down.

The first two were in Rochford, Essex and Cambuslang in Lanarkshire, and Ceeney said they were “hugely popular,” with 96 percent customer satisfaction.

Earlier this month 13 new banking hubs were unveiled, bringing the total up to 25.

In December 2021 a number of cash pilot projects were also launched, in which convenience stores were paid a small sum to provide a cashback service for customers.

Ceeney explained: “At ATMs the average withdrawal is £75 and usually you can get nothing under £10, but we found that in the cashback scheme the average customer was withdrawing less than £20. Often it was sums like £5.76. People were just withdrawing the exact amount they needed.”

The project is now being rolled out across the country.

But while measures have been taken to improve access to cash, it has been predicted Britain could go cashless by 2026.

Ceeney is sceptical and said: “We could go cashless but not any time soon. I'd be staggered if we will do it in the next couple of decades.”

“The question is, can you get everybody to go digital? It’s doable but not without intervention,” said Ceeney, who compared the situation with the demise of analogue television, which was switched off in the UK in October 2012.

“There were segments of society who couldn’t afford a new TV or didn’t want one but Digital UK achieved it, after five years,” she said.

But Scott does not accept the digital television analogy and said: “We are being told that digital is an upgrade to cash but it’s not. Digital money is underpinned by cash. Units in your bank account are a promise, saying you can redeem them in cash. Digital is like a casino chip. It’s just a promise to pay and confidence in the digital system is predicated on access to cash.”

He pointed to customers of Northern Rock queuing to withdraw cash from their accounts from the doomed British bank in September 2007 after it became over-exposed during the sub-prime mortgage crisis.

Scott also pointed out that in Sweden the government had taken measures to slow the rush towards a cashless society because of fears about financial instability and the danger of Russian cyberattacks.

The Epoch Times has reached out to the Treasury department of the British government for comment.