Cash isn't king: vulnerable short-changed by virus

Coronavirus is accelerating the use of contactless payments, but there are fears this could leave millions of people behind.

traveller in a protective suit  withdraws cash coronavirus
A traveller in a protective suit withdraws cash from an automated teller machine in Sheffield, United Kingdom. Image: Tim Dennell, CC BY-SA 2.0

Getting groceries in the coronavirus crisis has been tricky for many people, but for Eric Jones - an 89-year-old Briton who lives alone and relies on cash - it has proved particularly perplexing.

Before lockdown, a volunteer drove Jones to a supermarket near his home in southern England to pick up a weekly shop and withdraw cash to pay all the people who support him at home, be it the podiatrist or his handyman.

This is no longer possible with social distancing, and Jones, who asked for his name to be changed, found online shopping too difficult.

“I tried and got very confused and forgetful. I couldn’t possibly manage with that now … I’m way behind with technology at my age,” he said via Age UK, a charity helping older people.

The global shift towards paying for goods and services electronically means groups who rely on cash – from the elderly to the homeless, young people to casual workers – can struggle to participate in the economy.

Concerns that the new coronavirus can live on surfaces has meant some retailers have stopped accepting cash, while many people stuck at home have switched to buying things online.

Most countries in Europe and Asia have some sort of contactless payment system, which typically involves holding a credit card or mobile phone over a device to make a payment.

In Britain, cash payments declined 15 per cent in 2019, with card payments accounting for half of all payments, according to UK Finance, a bank lobbying group.

The nation is now at a tipping point that could leave millions of people behind, according to a review of the online economy by Access to Cash, a group of independent finance experts, that was released in February.

While UK Finance has not shared data on 2020 payments, it said the coronavirus crisis could have accelerated the shift.

A move to a cashless society will not benefit all groups equally. The groups that are most likely to be excluded will be women, rural communities, and the elderly.

Mayada El-Zoghbi, managing director, Center for Financial Inclusion 

Cash is king? 

Over the lockdown months, Jones had his groceries delivered through a scheme run by his local council, placing an order over the phone and paying a delivery driver in cash.

But he still struggles to get to an ATM to take out money. It either means walking to a corner shop to take out a small amount each day or taking a bus to one, which he said makes him feel vulnerable given the risk of catching the virus.

Going cashless reduces the risk of crime, as well as being easier and faster, say advocates, but there are myriad reasons why certain groups prefer, or are forced to, stick with cash.

Some people find cash helps with budgeting, especially those on lower incomes, while others do not have the skills to use digital payments or cannot access the internet.

Add to that people who cannot open a bank account as they lack a fixed address or credit history.

A dependence on cash can be linked to the digital divide that exists in both rich and poor countries, said Mayada El-Zoghbi, managing director for the Center for Financial Inclusion (CFI), an independent US think tank.

“A move to a cashless society will not benefit all groups equally. The groups that are most likely to be excluded will be women, rural communities, and the elderly,” she said.

Covid-19 has expedited the need for contactless transactions all around the world as governments look for ways to transfer cash to individuals and businesses quickly and efficiently.

“In some countries, like the US where a large part of the low-income segment does not have a bank account, pushing out these payments has been a challenge,” she said.

Future is electronic 

As a result of the pandemic, cash withdrawals from ATMs are understood to be down “dramatically”, by more than 50 per cent in many European countries, said research firm McKinsey.

In Britain they were down 60 per cent in April, against the previous year, according to Link, which runs Britain’s ATM network.

Before the crisis hit, many cities had already introduced legislation to prevent the collapse of cash infrastructure.

In March, Britain indicated it would also legislate to protect cash, but the pandemic has made doing so even more urgent, said Neil Johnson, policy manager at Age UK.

“We need to be very careful we don’t inadvertently slip into a vicious circle, where less cash is used, those costs [for retailers accepting it] increase, which actually stimulates further decrease in the amount of cash that is used,” he said.

The trend towards cashless payments also affects homeless people who might not be able to access electronic payments and rely on loose change handouts - made even trickier in lockdown.

Greater Change, a British-based social enterprise, was also working to resolve the issue before the crisis hit by creating ways for people to donate directly to homeless individuals, either online or through contactless payment points.

The organisation set up pay points across cities such as London and Oxford, but many were in bars and stations, meaning they have been out of action.

Jonathan Tan, chief operating officer, said there has been an uptick in web donations, but does not have figures to share on the impact to donations caused by the coronavirus.

“It has sped up the demand (for cashless donations),” he said. “We need to ramp up our capacity to handle that.”

This story was published with permission from Thomson Reuters Foundation, the charitable arm of Thomson Reuters, that covers humanitarian news, climate change, resilience, women’s rights, trafficking and property rights. Visit

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