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The Hopes and Fears of a Scotland Hurtling Towards a Cashless Society

Duncan MacRae


cashless, contactless payment

As digital transactions rise, Scotland is losing more than 40 cash machines per month. Are we ready for a cashless society?

It’s 600BC. Armenia has just been created, Marseille has been founded by Focei following a naval battle on Carthaginians, the Archaic period of sculpture has begun in Ancient Greece, and a pitcher (container) has just been made in Corinth, what is now known as south-central Greece (it can be viewed at The British Museum in London if you’re interested).

And the first known currency was created by King Alyattes in Lydia, now part of Turkey.

Prior to this, humans around the globe had relied on the barter system – a direct trade of goods or services. The going rate was generally one goat for three kilderkins of ale (this would fill 144 of your modern-day pitchers), three kilderkins of ale for six barrels of apples, six barrels of apples for a cache of erotic petroglyphs, and so on.

Although the first coins used as currency were actually developed in China, King Alyattes’ coins, featuring a roaring lion, are believed to be the world’s first official, minted currency.

Coins eventually evolved into banknotes around 1661 AD, and then, in 1946, the first credit card was introduced. Skip ahead a few years, and you can now buy your café latte with the tap of a smartphone – not a goat in sight.

Cash has served humans adequately for a number of years, but, with the advent of digital banking and contactless payments, are its days numbered? Most certainly, according to Mei Lee Quah, an associate director at Frost & Sullivan, whose area of expertise lies in the telecom and payments markets.

“A cashless future will be inevitable,” she says. “The trigger for the final transition to cashless will be when cash becomes too costly to supply and to accept. There are already indications that change is coming, albeit slowly but surely.”

The benefits of going cashless are potentially numerous, though. Despite a few well-publicised thefts of cryptocurrencies, it’s generally believed that going cashless will reduce financial crime, as the traditional physical theft of cash will no longer be a possibility for criminals.

It could also reduce the amount of money laundering, as there should always be a digital ‘paper trail’.

The time and various costs of producing, handling, depositing, exchanging and storing cash will be negated. Increased speed of transactions, easier consumer budgeting and even reduced transmittal of disease are also a bonus.

But, while there are benefits to be enjoyed, concerns remain, and there are many problems to solve.

One of the biggest issues regarding a society that is becoming increasingly cashless is whether or not people, and the infrastructure, are ready for it.

Natalie Ceeney, the chair of the Independent Access to Cash Review and a former chief executive of the Financial Ombudsman Service, has warned that the UK is “sleepwalking into a cashless society – and leaving millions behind”.

Shops are increasingly going cashless, bank branches are shutting down, and free-to-use ATMs are closing at a rate of around 6% per year.

Scotland alone is said to be losing more than 40 cash machines per month. In November 2018, LINK, the UK’s largest cash machine network, revealed that it had 6,037 cashpoints in Scotland – 330 fewer than it had in March.

The number of its ‘free to use’ ATMs had also dropped by almost 200 over those eight months to 5,198.

An Access to Cash Review, published in March 2018, stated that 8 million adults in the UK would struggle to cope in a cashless society, with them describing cash as an “economic necessity”.

The ATM closures are just the “tip of the iceberg”, the report suggested, adding that “cracks in the system are showing”.

In the midst of all this, it’s little wonder so many are concerned about how they can access their money and stay on top their financial affairs.

Ceeney says: “We need to take action now. Our research was clear – Britain is not ready to go cashless. That doesn’t mean we don’t like using our cards, direct debits and even smartphones to pay for things. As a nation, we are using digital payments with increasing ease.

“There are a number of services that we think are so important that we legislate to make them ‘universal’. In Britain, we all have the right to send and receive letters wherever we live. To get clean water to our homes.

“To have a Post Office nearby. Shouldn’t the right to get and to use cash be seen as similarly essential?”

Speaking at a parliamentary debate regarding bank closures and digital inclusion, Kate Forbes MSP, Scotland’s Digital Economy Minister, said she believes the worst impacts are felt by rural communities – small businesses and the most vulnerable people in society.

“Going into a branch remains the only feasible way for many of them to conduct their banking,” she says. “The key message is that, although banking needs are changing and there are new ways to bank, customers still require choice, and those who do not want to or cannot manage digital options should not be left behind. Digital progress is a great opportunity to be more inclusive, but with branch closures, digital progress has been seen as being exclusive, which is not right.

Scotland’s communities are now feeling the effects of bank closures, which she says have left many areas with significantly reduced branch coverage.

“Finding solutions, and concrete and tangible actions to respond to the strength of feeling, must be the responsibility of all banks,” she suggests. “It is not just about resolving the challenges that we and communities around Scotland currently face. It is likely that the issue will continue to be a challenge that banks must resolve.”

There are two main challenges, according to Stephen Ingldew, CEO of FinTech, a not-for-profit organisation responsible for boosting Scotland’s fintech economy through innovation, collaboration and inclusion.

“One is the infrastructure of technology and digital reach,” he explains. “That’s a broad issue and there are big plans in Scotland surrounding the rollout of 5G. It’s absolutely crucial, in the same way, back in history, that the rollout of electricity was.

“We need a strategic approach to ensure that nobody is excluded from access to a core utility, such as the internet. That’s a broad, political, strategic consideration, and there’s significant investment going into that.

“However, it’s all well and good giving people access to the internet and financial technologies, but it’s then important that everyone understands how best to use those. We need to help people to learn and understand to make sure they are capable.”

With retail banks moving out of communities with their physical presence, it’s leaving a bit of a vaccum, he adds.

“So the question that’s on the table is how do you provide the opportunity to communities, not just to get access, but to go somewhere where you can get guidance? Because you can’t necessarily have a money adviser in every rural location. How do you bring people together in those sorts of communities?

“There are a couple of initiatives being looked at around community banking, the role of the Post Office etc. I don’t think there is an easy answer. But, I think’ it is key to look at how digital technologies can bring communities together to work together.”

Although the UK Government retains legislative and regulatory responsibility for banking, the Scottish Government has called on Westminster to “act and respond in different ways”.

And, according to Forbes, the Scottish Government remains ready to work with UK ministers, banks and other stakeholders to support customers and communities through the closures. September 2019 will see Scotland’s fintech community gather in a Fintech Festival to discuss the challenges increasingly cashless societies face, as well as how Scotland can take advantage of the potential opportunities that come with it.

The festival will take place in a series of events throughout the country between 9th September and 27th September.

As part of this, DIGIT will host its 6th annual Financial Technology Awards Summit & Awards on 25th and 26th September in Edinburgh’s Dynamic Earth. For further details and to book your place at the summit for free, visit

Duncan MacRae


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