Cash isn’t dead – yet.
However, the recent report from the Treasury Committee suggests that the rapid decline in cash acceptance could create serious economic and social risks, especially for small businesses and the communities they serve.
While contactless payments and digital wallets offer undeniable convenience, the Committee’s findings highlight a crucial issue: millions of UK consumers still rely on cash, and removing that choice risks excluding them entirely from everyday transactions.
Why Cash Matters to Your Business
Right now, UK businesses aren’t legally required to accept cash. Many have quietly moved to card-only models, especially after the pandemic accelerated digital adoption. But before you follow suit, ask yourself:
- Are you unknowingly turning away loyal customers who prefer—or depend on—cash?
- Are rising card transaction fees quietly eating into your margins?
- Could a payment system outage bring your trading to a halt?
The Treasury Committee is urging the government to step in and monitor declining cash acceptance levels more closely.
While no laws mandate cash acceptance yet, the conversation is clearly shifting. And with regulators increasingly focused on financial inclusion, this could soon become a compliance issue as well as a commercial one.
For many consumers—particularly older people, low-income households, and those without reliable digital access—cash isn’t just a preference; it’s a necessity.
Moving to digital-only transactions risks creating what the Committee calls a “two-tier society”, where financial services and essential goods become less accessible to those who need them most.
Response from the Federation of Small Businesses
Tina McKenzie, Policy Chair at the Federation of Small Businesses (FSB), responded to the ‘Acceptance of Cash’ Treasury Committee Report, saying: “For thousands of small businesses, cash remains an essential payment method – and it’s vital they continue to have the option to accept cash, as well as other payment methods, now and in the future.
“Small firms must have the freedom to choose the payments mix that works for their individual circumstances, be that cash-only, card-only, digital or fintech solutions, or a combination of any or all of these.
“But for cash to remain a viable method for small firms and consumers, including many vulnerable groups, the right infrastructure has to be in place.
“We’ve seen a huge decline in the bank branch network over recent years, with the infrastructure supporting use and access to cash steadily contracting. These closures have led to more small firms opting for digital-only payments, as the logistics and costs of cash handling become unmanageable.
“We need to see facilities like shared banking hubs brought in at speed, providing services to both businesses and consumers.
“Yet the current pace of agreeing and setting them up doesn’t currently match the speed of bank and building society branch closures in local high streets. Our research found a third (34%) of local businesses say reduced ability to accept cash payments in the future would pose a big risk to their local high street.
“In areas where bank branches have closed, banking hubs provide consistent and secure facilities for cash withdrawal and deposit for businesses, as well as financial advice. This is particularly crucial in rural areas, which are the hardest hit by closures and often have higher demand for cash payments.
“Our communities are also being hit by closures of post office counters, which need to be maintained to help small business owners deposit cash.
“We want to see UK banks sign up to maintain their cash services in post offices for the next five years – including small business owners being able to deposit cash takings. This will guarantee continued cash infrastructure for small firms and their customers.
“Cash is also a key competitor to cards and other kinds of payment, acting as a brake on rising fees for other forms of payments, as well as acting as a reliable backup if digital systems are unavailable. It’s also key in places with poor digital connectivity.
“We need to make sure there’s a flexible, adaptable and inclusive payment system, which allows small firms to choose the payments mix which works for them – while making sure cash is still very much part of the equation.”
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