On a mild September afternoon in 2015, a man entered the Walsall mall in the West Midlands and headed straight for the local NatWest branch.
In his hands were several black garbage bags filled to the brim, but not immediately suspicious to others. However, when he reached his destination, the bags burst under the weight of the load, and £700,000 in cash fell out of them.
Instead of raising alarms among NatWest employees, branch staff helped the man repackage the notes into stronger burlap bags before the cash was delivered to the bank vault.
The huge deposit was made by Bradford jeweler Fowler Oldfield. , which has deposited over £260 million in cash with NatWest affiliates over a five-year period. Sometimes their number was so large that they filled two floor-to-ceiling safes in the Walsall branch, and the excess had to be stored elsewhere.
Despite the Yorkshire jeweler's annual turnover of only around £15m, NatWest did not report the documents as suspicious until 2016, when police said they were investigating Fowler Oldfield.
In 2021 Financial Conduct Authority (FCA) sued NatWest, where FTSE 100 was convicted in a criminal case and fined £265m for violating anti-money laundering rules on deposits.
Huge sums were found to be profiting from an alleged money laundering scheme. Claire Montgomery, a lawyer for the FCA, alarmed the court: «Someone walked the streets with black cash inserts.»
This case shows that British lenders are not enough to prevent money laundering, especially when it comes to about cash transactions.
However, amid regulatory pressure, there are now growing concerns that banks are becoming too zealous with cash. Last week, The Telegraph reported that NatWest was introducing new restrictions on cash deposits and withdrawals. The move has sparked warnings that banks are pushing customers into a «cashless society», threatening to deprive millions of people of access to basic financial services and prompting political backlash amid privacy concerns.
«Sleepwalker in a cashless society»
The decline of cash is a phenomenon that has been observed for much of the 21st century.
The rise of digital payments, including Apple Pay and Google Pay, which allow users to pay for goods and services using mobile phones, has made banknotes and coins inconvenient for many.
Data from the Bank of England shows that the use of cash for everyday transactions has been declining rapidly for at least a decade, from over 50% of all transactions in 2010 to just 15% in 2021. Meanwhile, almost a third of all payments in the UK were made using contactless payments. methods in 2021, according to UK Finance.
Customers line up to use the world's first ATM in Enfield, Middlesex, 1967. Photo: Mirrorpix then chancellor to swear to protect cash in 2019, leaving all coins and notes in circulation, from the penny to the £50 note.
He said at the time, “Technology has changed banking for millions of people, making it easier and faster to complete financial transactions and pay for services. But it is also clear that many people still rely on cash, and I want people to have a choice in how they spend their money.”
In the same year, Natalie Sini, civil servant and business woman published her book. a government-commissioned review of the future of access to cash, in which she warned that Britain risked «sleeping into a cashless society».
“We cannot wait long for action,” she wrote. “Once infrastructure is destroyed or communities are damaged, it is very difficult to restore them. But if we act now, we can prevent harm and prepare for a world with less cash without social and economic damage.”
Sini cited the closure of bank branches and ATMs, especially in rural areas, as a key issue. She added that these closures create a vicious circle, making it harder for local residents to access cash, as well as increasing the costs of local retailers using cash, which pushes them to go digital only.
The number of ATMs has decreased from more than 70,000 in 2015 to just 51,000 in 2021.
ATMs in decline: number of ATMs
Branch closures can have a significant impact on communities, especially in rural areas. Richard Furd, Liberal Democrat MP for Tiverton and Honiton in Devon, says: «When people go to their bank or building society, it's often about something pretty big and serious in their lives.»
“I can think of an old man whose wife died, and one of the first things he had to do after his wife died was to take care of her financial affairs. The way he saw fit to do, like many people of his generation, was to go and talk to the local bank manager.
“This kind of personal service in times of very acute grief is underestimated. I think banks do not fully appreciate the importance of such personal service and their circumstances. Given that the government has asked the FCA to impose a consumer duty not to debank individuals, how about a similar duty not to debank the community?”
In an attempt to combat this trend, the government has overseen the creation of so-called «general banking centres», which effectively act as mega-branches that are used by several large creditors, with the counter service run by the post office.
For now Eight of these centers are currently open, with 60 more under development. One center in Axminster, which is in the Furda constituency, was due to open this month but has been delayed, which he says has raised many questions from voters.
Despite these efforts, the rapid decline in cash shows no signs of easing. In April, Sir John Cunliffe, Deputy Governor of the Bank of England, told a financial summit that “cash is likely to shrink and become less usable for day-to-day operations on its own.”
1304 Sharp decline in cash use
Threadneedle Street's own projections show that only 9% of all payments will be made in cash by 2028, while UK Finance expects this to drop to 6% of all payments by 2031. also raised concerns about privacy and civil liberties. The public has much more control and privacy when using cash compared to digital transactions, which leave a traceable footprint. While the latter may be convenient for banks and regulators, it also restricts personal freedoms.
Sir Jacob Rees-Mogg, Conservative MP and former business secretary, says increased control over transactions is a worrying consequence of a cashless society.
He says: “This suggests that people using cash are doing something.» wrong. You should be free to do whatever you want in this country within the law, and [banks] have been given the right to track transactions, often for no reason.”
Are you worried about the concept of cashless payments? society?
It seems that this issue goes beyond the party-political line. During a parliamentary debate in March, Martin Day, SNP MP, expressed similar concerns.
He said: “There are also those who are seriously concerned about the privacy of electronic payments. In an age of technology, algorithms, digital footprints, and cybercrime, it's understandable that some—maybe many—of our constituents would prefer the financial privacy afforded by cash transactions.
“Some voters have written to me in recent weeks to highlight this. Many have said they view barriers to using cash as a violation of their right to privacy.»
Groups such as Cash Matters, who describe themselves as a «civil society movement,» campaign to «support the existence and the relevance of cash as an integral part of the payments landscape now and in the future.”
The group claims that cash is the most secure payment method, resilient in times of crisis, and provides privacy when fraud and identity-gathering ramps up. The group adds: “Banknotes and coins reflect the identity of a nation and its magical moments, presenting to the world its most significant people, landmarks and values.” older people can't use digital payment methods, he adds that he's more convinced by the «surveillance argument».
He says: «You have to be aware of the risk of becoming a surveillance society, don't be paranoid.»
Bank branch closures particularly affect older people and rural communities. Photo: Martin Keane/PA
Earlier this year, the Bank of England and the Treasury supported the creation of a «digital pound», raising further concerns about the erosion of financial privacy.
The so-called central bank digital currency (CBDC) ), dubbed «Britcoin», will use blockchain technology, which is currently used by cryptocurrencies to record transfers in a central digital ledger.
Threadneedle Street is already creating money digitally by issuing new reserves at commercial banks, but in theory a CBDC would allow the Bank to digitally issue new currency directly to individuals or businesses. It will also allow people to store digital currency on smartphones without the need for a bank account, similar to how cash can be stored in a wallet.
Privacy campaigners have raised concerns about CBDC, and a developer working on the Britcoin project says it can be used to verify buyers' age or nationality.
There are also concerns in the upper echelons of the bank itself: Carolyn Wilkins, Member Committee on Financial Policy, in May, warned about the risks to privacy.
She said that the bar should be «high». ” for technology, as “privacy and the ability to monitor citizens are at the top of the list of concerns” due to the sprawling mission of the authorities.
On the fringes, the issue has been taken up by conspiracy theorists who claim that digital currencies are being used to control the population. Earlier this year, conspiracy theorists seized on video footage of a speech at the World Economic Forum where they claimed a «Davos agent» was calling for a cashless society and saying that those who consider themselves «less desirable» would be blocked.
< p>In fact, Eswar Prasad, Professor of Economics at Cornell University, spoke at the event and talked about both the benefits and dangers of CBDC.
Meanwhile, for Sir Jacob, the main problem of access to cash is ownership . «It's your money and you should be able to withdraw it all if you want,» he says.
“Now, if a 90-year-old woman walks into a bank branch with someone dodgy and tried to withdraw cash, the bank has an obligation to prevent exploitative fraud. But if a sane person wants to withdraw cash, they should be able to do so.”
The increase in stores refusing to accept cash has also led to calls for the government to ban retailers from refusing to pay in cash. While cash is legal tender, businesses are not required by law to accept it. There is a growing list of popular street restaurant chains that have stopped accepting cash altogether, including Prezzo, Itsu and Côte Brasserie.
At the same time, many Starbucks and Burger King branches also only accept card payments.
After Covid, more stores are either not accept cash, or «encourage» payment by card. Photo: © MAXIM ZMEYEV/Reuters
Covid has accelerated this trend as companies rushed to cut back on cash since the start of the pandemic, but many businesses have opted to maintain a cashless policy.
The reasons for this vary: Prezzo says it makes work «much easier and faster» for employees and customers. Côte Brasserie said it has moved to a full-time card-only operation due to cuts in local banking and «the safety of its teams». Meanwhile, Asian network Itsu said cashless allows it to serve customers «safer and faster» without being distracted by cash handling policies.
Other chains that continue to accept cash but say they are «encouraging» card payments include Caffè Nero, Pizza Express and Greggs.
While these rules may make it easier to run a hospitality business, they also risk alienating part of the population. which still uses cash payments.
According to the FCA, more than a million adults in the UK do not have a bank account and rely solely on cash.
However, not every business avoids cash. JD Wetherspoon said many of her clients still prefer to use cash, adding that turning away people who show up with legal tender is «controversial».
Legislative safeguards
There is growing pressure on the government that it does more to guarantee access to cash. Last year, a petition calling for new legislation to prevent retailers from refusing to pay with cash garnered more than 33,000 signatures, easily over the 10,000 threshold, to elicit a government response.
However, despite the growing backlash, ministers said they have no plans to force stores to accept banknotes and coins. “The government does not plan to introduce mandatory cash acceptance. Businesses can choose the forms of payment they accept. The government's legislative proposals support cash acceptance,” the response reads.
Sir Jacob agrees. “We need to be wary of our legislative weapons,” he says.
Under the recent Financial Services and Markets Act, the FCA will become the lead regulator of access to retail cash and will be empowered to ensure that companies continued to provide deposit and withdrawal services across the UK.
However, given the potentially irreversible decline in cash use, stronger measures may need to be taken to ensure that some of the most vulnerable in society continue to have access to basic economic rights.
A cashless society is a form
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