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How the rise of a cashless society is leaving some people behind
Fast transactions and card-only options are increasingly commonplace across Bristol as we move towards a digitally-driven, cashless society.
But the shift is putting some of the city’s most deprived neighbourhoods at risk of getting left behind and creating “cash deserts”, according to a ground-breaking new study.
Researchers at the University of Bristol found the people most reliant on, and likely to use cash, live in the areas that have witnessed the biggest decline in banks and free ATMs.
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The study mapped access to cashpoints – and other means of getting money – across the city and cross-referenced the data with socio-economic and age demographics of communities.
It found “stark differences” in the different neighbourhoods, with the provision of cash almost opposite to the geographical need for it.
2015 English Indices of Deprivation deciles in Bristol. Source: The University of Bristol’s study
“As part of our research, we regularly encountered people who found it difficult to access mainstream banking products,” said Dr Daniel Tischer, a lecturer in political economy and organisation studies at Bristol University’s School of Management.
“They do not use digital payments because they find it easier to manage their money in cash, and simply had a lack trust in digital banking. For these people, cash very much continues to be king.
“It’s important to understand the way in which access to cash is changing for the UK population.
“Much of the debate to-date has focused on the overall number of ATMs or bank branches in the UK, without much understanding of the importance of geography – but where these ATMs are makes a big difference.
“While a future without cash may be almost inevitable, if the patterns found in Bristol are replicated nationally, it is likely that we’ll see a return to old geographies of financial exclusion, with deprived communities struggling most as cash becomes less common.”
Some 1,700 cashpoints nationwide changed from free to fee-charging at the start of 2019, according to research by consumer group Which?.
University of Bristol researchers found more than two-thirds of the ATMs which became fee-charging in the city between October 2018 and March 2019 were within deprived neighbourhoods.
On Whiteladies Road, only 29 per cent of existing cashpoints are not owned by banks, compared to 89 per cent on Stapleton Road.
The study found a quarter of ATMs in Bristol have no alternative within 250metres in the event of their closure or malfunction, while 49 per cent of fee-charging ATMs have no free alternative within 250metres.
Researchers warned this has particularly negative implications for people with limited mobility and risks creating “cash deserts”.
Post Office branches in more deprived areas are less likely to offer cash services
While Post Offices are seen as key to the continued provision of cash, the study found branches in the most deprived areas are less likely to offer this service than their more affluent neighbours.
Report co-author Jamie Evans, from the Personal Finance Research Centre, warned the market is not currently working in people’s best interests, saying: “Future policy should seek to understand the needs of such groups and take these more fully into account.”
The work has given rise to a new comparison tool called the Availability of Cash Index (AvCash Index), which can be used to measure access to cash within neighbourhoods. It will identify those areas most at risk of becoming urban cash deserts should ATMs close or be temporarily out of service.
“Our research raises questions about the extent to which cash provision has been driven not by the needs of consumers, but by the needs of financial services organisations, with profitability ultimately coming at the detriment of those who still depend on cash,” said the report’s co-author Sara Davies.
“It’s important to recognise that those who depend on cash are not just consumers; over three-quarters of convenience store customers pay by cash, and it’s fundamental to businesses such as taxi drivers or window cleaners.”
Read more: Moving towards a cashless society
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