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Navigating the Transition to a Cashless Society: Balancing Inclusion and Digital Innovation


The ongoing shift towards a cashless society in the UK presents an intriguing landscape, promising enhanced convenience and efficiency. However, we must remain cognisant of the potential impact on cash-dependent populations. As we embark on this transformative journey, it becomes imperative to consider their needs, ensuring inclusivity and upholding democratic values. In this article, we commend the Payment Choice Alliance for its commitment to preserving payment options, exploring the significance of balancing cash and digital payments, advocating for tailored solutions, and emphasising collaboration among stakeholders. Moreover, we propose policies prioritising payments as digital public goods, with accessibility, transparency, and security at the forefront.


Preserving Inclusion and Upholding Democratic Values:


In any societal transition, ensuring that no segment of the population is left behind is vital. While a cashless society offers numerous advantages, we must recognise the challenges faced by those relying heavily on cash. The Payment Choice Alliance deserves praise for recognising this and actively working to preserve payment options. By advocating for inclusivity and upholding democratic values, they demonstrate a commitment to safeguarding the needs and rights of all individuals.


Balancing Cash and Digital Payments:

A smooth and inclusive transition requires striking a delicate balance between cash and digital payments. Each has its merits, and finding equilibrium is critical to maintaining financial accessibility for diverse socioeconomic groups. For example, rural communities or individuals with limited digital infrastructure access may rely heavily on cash. Neglecting their needs in favour of a digital approach risks exacerbating the existing disparities. Tailored solutions catering to these groups are crucial for ensuring a seamless transition.


Collaboration Among Stakeholders:

The responsibility of achieving a successful transition rest not only on the shoulders of consumers but also on the collaboration among retailers, banks, and the government. As crucial facilitators of financial transactions, retailers should actively provide diverse payment options, including accepting cash. Simultaneously, banks and financial institutions must strive to support cash-dependent individuals by maintaining accessible services and promoting financial literacy. Government involvement is essential in establishing regulatory frameworks that foster an inclusive transition and protect the rights of all stakeholders.


The Importance of Cash in the UK Economy:

Contrary to assumptions, cash remains a vital component of the UK economy. Recent reports indicate that cash transactions hold a substantial share despite the growth in digital payments. According to the Bank of England, as of 2021, cash accounted for around 17% of consumer payments by volume and 34% by value, highlighting its continued significance. Furthermore, cash remains essential for specific sectors, such as small businesses, where it provides a tangible and efficient means of conducting transactions.


Cash remains a valued form of money for specific demographic groups, such as older people and individuals with lower incomes, who rely on it for budgeting and managing household finances. According to recent data, in July 2022, 27% of those aged 65 and above-preferred cash as their payment method, showing an increase from 20% in July 2021 (though still below the pre-pandemic figure of 38% in January 2020). It's important to consider that preference for cash is influenced by factors such as education, wealth, and health. For instance, a survey conducted by the Financial Conduct Authority in 2020 revealed that 46% of digitally excluded individuals, 31% of those with no educational qualifications, and 26% of those in poor health heavily rely on cash. Furthermore, individuals with physical and cognitive disabilities may find other payment methods challenging. Interestingly, even individuals who don't frequently use cash still perceive it as valuable. In a recent survey, only 35% of respondents in July 2022 believed they could go more than a month without cash, which indicates a decrease from the 48% observed in January 2021, bringing it back to pre-pandemic levels.



Promoting Financial Inclusion and Choice:


While digital payments have experienced remarkable growth, it is crucial to acknowledge that not all individuals have equal access to digital infrastructure or the necessary technology. This digital divide creates a potential barrier for those relying heavily on cash, such as elderly individuals, low-income communities, and rural populations. By preserving cash as a payment option, we promote financial inclusion and ensure that everyone, regardless of socioeconomic background, can participate fully in the economy.


Latest Growth in Digital Payment Adoption is undeniable:


Despite the continued relevance of cash, it is undeniable that digital payment adoption has seen significant growth in recent years. Reports indicate that the COVID-19 pandemic has accelerated this trend, with a substantial increase in online transactions and the usage of contactless payments. According to UK Finance, contactless payments accounted for 27% of all transactions in 2020, a significant leap from previous years. Furthermore, a survey by Statista revealed that as of 2021, 74% of UK adults regularly used online banking services, further highlighting the growing preference for digital payments.


The Role of Retailers in Financial Inclusion


Retailers play a critical role in advancing financial inclusion, offering multiple payment options to cater to diverse customer needs and contribute to communities' financial well-being. Notably, grocery giants like Sainsbury's and Tesco have embraced inclusivity by accepting cash and providing convenient ATMs. This supports cash-dependent populations and fills the void left by the diminishing number of bank branches. Imagine if these retailers also offered secure cash deposit solutions, facilitating financial management for local businesses.

Beyond accessibility, retailers empower individuals to achieve financial stability by providing essential solutions such as cash handling, bill payments, and money transfers. They develop tailored financial solutions that address specific challenges, offering micro-loans to support small businesses and creating savings programs to encourage financial growth. Retailers foster digital payment ecosystems by accepting various methods like cash, cards, mobile wallets, and digital currencies. This ensures active participation in the shift towards a cashless society, allowing individuals to choose their preferred payment method. Financial literacy is a significant focus for retailers, as they provide resources, workshops, and guidance to empower individuals to make informed decisions and manage their finances effectively. This commitment to financial education contributes to long-term well-being and fosters a culture of financial empowerment.

Collaborations between retailers and financial institutions expand the range of services, leading to innovative products that address the unique needs of underserved communities. By combining local knowledge and customer reach with the expertise and infrastructure of financial institutions, this collaboration drives positive change.


Policies Favouring Payments as Digital Public Goods:

In the journey towards a cashless society, it is essential to view payments as digital public goods, ensuring accessibility, transparency, and security for all individuals. One notable example of such policies can be seen in India with the Unified Payments Interface (UPI). UPI is a real-time payment system developed by the National Payments Corporation of India (NPCI), which allows users to link multiple bank accounts to a single mobile application. The introduction of UPI in India exemplifies a policy that treats payments as a digital public good. It has revolutionised how people transact, making digital payments simple, convenient, and accessible to many users. UPI has significantly contributed to financial inclusion by reducing barriers to entry, enabling even individuals without traditional bank accounts to participate in the digital economy.


The success of UPI in India can be attributed to several factors. First, it operates on an open and interoperable system, allowing various banks and payment service providers to connect and offer UPI-enabled services. This openness promotes competition, innovation, and user choice, leading to a vibrant payment ecosystem. Second, UPI prioritises security and privacy. It utilises robust authentication methods such as multi-factor authentication, biometric verification, and unique payment addresses (UPI IDs) to ensure secure transactions. These measures build trust among users and instil confidence in the digital payment system. Third, UPI offers a seamless user experience by integrating with various applications, including e-commerce platforms, bill payment portals, and person-to-person transfers. This integration provides convenience and encourages the widespread adoption of digital payments.


By considering payments as digital public goods, policies like UPI in India have transformed the payment landscape, driving financial inclusion and empowering individuals from all walks of life. These policies demonstrate the potential of innovative approaches to enable the widespread adoption of digital payment systems and navigate the transition to a cashless society.

As countries and regions embrace digital innovation, policymakers must prioritise policies favouring payments as digital public goods. This involves investing in technological advancements, strengthening cybersecurity measures, and ensuring equal access to digital payment systems. By treating digital payments as a public good, governments can foster an inclusive and equitable financial ecosystem that benefits all individuals, regardless of socioeconomic background—treating digital payments as a public good guarantees everyone equal opportunities to participate in the financial ecosystem.





As the UK continues its transition towards a digital payment landscape, it is vital to recognise the ongoing importance of cash in the economy. Achieving a balanced transition to a cashless society requires addressing the impact on cash-dependent populations while embracing digital innovation. The Payment Choice Alliance's commitment to preserving payment options reflects inclusivity and democratic values. Collaboration, tailored solutions, and recognising cash's importance to specific demographics are essential. Digital payment adoption has surged, but unequal access to digital infrastructure affects the elderly, low-income communities, and rural populations. Preserving cash ensures financial inclusion and equal participation.


Retailers play a vital role by offering diverse payment options, including cash acceptance and convenient deposit solutions. Collaboration among retailers, banks, and the government is crucial for an inclusive transition. Prioritising payments as digital public goods through policies drives accessibility, transparency, and security. Technological advancements, cybersecurity measures, and equal access must be emphasised.


Let's navigate this transformative journey by embracing inclusivity, stakeholder collaboration, and tailored solutions. Preserving cash's value and empowering individuals ensures financial autonomy and choice. Together, we shape a future that balances digital innovation with inclusivity, serving the diverse needs of all participants.



In our journey towards a cashless society, we must consider the impact on cash-dependent populations. Our economy should prioritise inclusivity and democratic values, providing payment options that meet diverse needs. Balancing cash and digital payments, tailored solutions, and stakeholder collaboration is crucial for an inclusive transition. I support a less cash economy, prioritising digitisation and policies that ensure accessible, transparent, and secure digital payments as public goods. - Dr Ritesh Jain 




Comments: (2)

A Finextra member
A Finextra member 16 May, 2023, 08:53Be the first to give this comment the thumbs up 0 likes

Thank you for sharing the views and insights, would love to know more about Digital Public Goods, gathered excellent usecase in India and its a phenomenal story, look forward to learning and reading more! 

A Finextra member
A Finextra member 17 May, 2023, 11:17Be the first to give this comment the thumbs up 0 likes

You have not mentioned the downside of digital payment. That is that everything you spend is trackable, regardless of whether you want it to be. Cash offer anonymity and there can be good reason why you may wish it to remain so. It is always assumed that this offers criminals and tax evaders the opportunity to operate, but it is not the case.

Ritesh Jain

Ritesh Jain


Infynit / Former COO HSBC

Member since

30 Dec 2022



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