EXCLUSIVE: As it seemingly becomes harder to user cash in Britain, the benefits of coins and notes are beginning to become clearer for some of our neighbours.
Experts have warned of the dangers of a cashless society (Image: Getty)
Card-only payments are a convenience to some and a barrier to others. But as we evolve into an increasingly digital world, it might not be as simple a case of young versus old when it comes to society’s winners and losers.
According to recent statistics from personal finance website Finder, one in 10 Brits no longer use cash. Meanwhile, just one in eight people use physical currency every day. While these figures may already seem stark for UK residents who love the tradition of coins and notes, life without cash is even more prominent in Nordic countries. Both Sweden and Norway have the lowest amounts of cash in circulation globally. However, following a brief but determined move towards a cashless society, both nations are now re-emphasising the need for legal tender to prevent financial exclusion and to safeguard against potential cyber attacks – many of which are carried out by hacking experts working for Vladimir Putin.
In Norway, legislation introduced last year means businesses can now be fined for not accepting bank notes or coins. The government also urges people to carry physical currency due to the “vulnerabilities of digital payment solutions to cyber attacks”.
Over in Sweden, physical cash is making a comeback, too. Niklas Arvidsson, associate professor at the Royal Institute of Technology in Stockholm, and author of Building a Cashless Society, says the shift towards a digital-only transaction culture in his country was halted abruptly following an investigation by its Central Bank two years ago.
“It’s a reaction to what has happened in Ukraine and the ongoing war,” he tells the Daily Express. “People without cash are more vulnerable to cyber attacks.
“If there are cyber attacks on electronic payment systems, cash is the only back-up and alternative.” He says the report concluded that Sweden must focus on improving the infrastructure for cash payments, including banking hubs and ATM systems.
“It even suggested that some stores should be forced to take cash when they didn’t before. Previously, any store was able to say no to taking cash from a customer.” And that is currently the case in the UK.
Just one in eight Brits use cash every day (Image: Getty)
The report also emphasised that cash would be needed “in the event of crisis or war”. Meanwhile, Emilie Mehl, Norway’s former justice and emergencies minister, said cash must be available for a “real emergency solution once [such a] crisis is upon us”.
And experts warn that moving towards a cashless world will marginalise sections of society, including elderly people and those with disabilities. “If you don’t have access to get online to use banking apps, then you’re going to struggle,” warns Elizabeth Anderson, CEO of Digital Poverty Alliance.
She insists there is “no reason to remove cash as a choice”, noting: “Particularly for younger people, understanding the value of money is very important.
“If you’re handing over a £10 note, it seems like you’re spending money. But if you’re just flashing your card to a contactless point, then it doesn’t quite have that same meaning in terms of developing a relationship with your money.”
Interestingly, she points out that a surprising number of younger people feel uncomfortable using digital and online banking. Recent research from Barclays revealed that Gen Z – those born between the mid-to-late 1990s and the early 2010s – are the least confident in managing their finances online.
Some experts argue that cash should never be eradicated from society (Image: Getty)
“It’s actually the youngest generation [of consumers] that will be hit hardest as they’re twice as likely as millennials to experience both digital and financial exclusion,” says Mrs Anderson. “Gen Z are actually the least confident generation in using the internet to manage their finances.
“There’s often an assumption that younger people are digital natives, but they’re actually not confident in managing their money.”
Yet Riccardo Tordera, director of policy and government relations for the Payments Association, believes a shift towards a cashless world will only be a positive development, even if it comes with increased risks.
“The way we pay for things has constantly evolved over time,” he explains. “Bank notes were a huge innovation when they were introduced and everyone was initially sceptical.
“But, as we’ve seen, it’s now mainstream. Changes on this scale need adaptation to make sure people are comfortable – and the same applies with moving towards a cashless society.”
Amazon Fresh stores offer ‘Just Walk Out’ technology (Image: Getty)
He insists the cashless model has emerged because people dont want to carry heavy wads of notes and low-value coins anymore.
“We use the term ‘cash’ in the wrong way anway,” he adds. “We have a card in our wallet and although it’s not a bank note, it’s still cash just in a different form.
“It’s much easier to have as many bank notes as you own in your card. It’s also much safer as if someone takes your phone, they shouldn’t be able to get into your online banking but if they steal your wallet from your pocket, then your money is gone.”
He can foresee a time when we will “walk into the London Tube and not even have to use our card as sensors will detect our arrival and automatically charge us”.
That idea may not appeal to everyone. Amazon Fresh stores currently offer Just Walk Out technology, which uses sensors and computer vision to automatically charge customers when they leave. This eradicates the need to queue and be served by a human cashier. But this hasn’t proved as successful as Amazon hoped and today (September 23) it announced plans to close all 19 of its stores across the UK.
Online scams have surged in recent years (Image: Getty)
There are significant risks posed by the advancement of technology and with the explosion of digital banking comes an increase in the risk of devastating financial scams and fraud.
Mr Tordera explains: “If you have more digital access ,you need to use it properly. You need to know what you have in your hands.”
Data shows a significant increase in online scams across the UK in recent years. There has been a surge in AI-powered scams and fake delivery texts which prey on older and more vulnerable online users.
The Financial Ombudsman Service reports that fraud and scam complaints reached a record high in 2024. Meanwhile, some industry records show that more than £7.5billion is being stolen through scams annually.
“We’ve seen signs of increased fraud by more digital and online use,” says Mr Arvidsson. “They often target elderly people and try to make them buy things or invest in cryptocurrencies.”
Mrs Anderson adds: “If you’re using cash, you know where it is at any given moment. You can see where it is when you’re handing it over. A lot of older people feel that if they don’t go online or use online banking, then they won’t fall victim to scammers. They don’t trust it.
Scores of banks have closed across the UK over recent years due to a change in consumer behaviour (Image: Getty)
“But this pushes people away from using legitimate and helpful services that can benefit their life.”
The issue has been compounded by the closure of most of Britain’s bank branches. As the shift towards online banking and mobile apps continues apace, companies such as Lloyds, Halifax, NatWest and Barclays have made the choice to shut hundreds of high street, bricks-and-mortar banks over recent years.
“There’s been lots of instances of banking apps going down so people can’t access their money at all,” Mrs Anderson warns. “Unfortunately, that’s a reality of moving all of your services online. If there’s a national outage or just your own personal internet isn’t working, you can’t get to your money.
“There’s no reason to remove cash as a choice. It fits into the wider picture of making sure there are always alternative ways of people being able to access their money.
“It’s like people being able to walk into their GP, or handing in their homework in real life or looking in your wallet and finding a £10 note and being able to spend it. Having online as well as offline options is really crucial.”
The drawbacks, according to Mr Tordera, are the price we have to pay for progress. He says more should be done to educate people on the potential dangers of online banking.
Experts believe people should be educated on the risks of online scams (Image: Getty)
“While an increased technological world comes with more risks, I don’t think people would want to go back to the older system,” he says. “We need to accept some risk, but overall there is a massive improvement to our lives.
“It’s like if you don’t lock your car, someone is going to steal it. But you are aware of that, so you always lock your car. It’s the same with digital banking.
“People have to be careful with their passwords and their facial recognition systems. You’ve also got to be careful not to lose your phone and be wary of scams.
“I think we should do a national campaign on this to boost awareness. The Government should write to every single person making them aware of the dangers and risks of banking online. Do we all want to go back to using paper to pay for things? No.”
When asked if he had any advice for the UK and the possibility of shifting towards a cashless society, Mr Arvidsson reiterated the need for balance. Safeguarding needs to be in place to protect vulnerable people while allowing for technology to advance, he cautioned.
“I am critical of Sweden as the situation is always changing,” he says. “First, there was a shift towards going cashless and now there’s an emphasis on trying to protect the cash system.
“My advice would be to have a good balance in promoting innovation and creative solutions, as well as technological improvements, while at the same time safeguarding the system and helping people who rely more on cash. Doing both at the same time is really critical.”
