Will shops and restaurants be forced to accept cash in the future? MPs are asking for evidence to see whether new rules are needed

MPs on the Treasury Select Committee are calling for evidence to determine whether new rules are needed to make accepting cash mandatory across Britain.

There are currently no rules requiring businesses – from shops to restaurants – to accept cash and the evidence will be used to determine the current state of its acceptance in Britain.

It will be examined whether companies should always accept physical cash and how much this would cost.

The use of cash has declined over the past decade as people mainly turn to contactless card payments.

The Treasury Select Committee said cash remains an “essential resource” for many.

“Research suggests that using cash can provide a crucial lifeline to groups such as those in long-term ill health or those at risk of economic abuse,” it added.

About 3.1 million people in Britain rely almost entirely on cash as a means of payment, according to data from non-profit organization Cash Access UK.

According to UK Finance, around 1.5 million adults used cash as their main spending method last year – the first increase since 2019.

It is said that this can be attributed to the cost of living crisis, with more and more people choosing cash over budget.

In 2022, only 900,000 people used coins and notes as their main spending method.

Overall, the use of cash fell to 12 percent of all payments last year – and UK Finance said 22 million adults are ‘mainly cashless’.

The decline in the use of cash increases the infrastructure costs of holding physical cash as a viable payment method, which could lead to disruption for businesses and consumers, according to the Bank of England.

Others have highlighted the dangers of over-reliance on digital payments, suggesting that accepting cash should be seen as a form of civil preparedness.

There are currently no regulations requiring businesses to accept cash.

Adrian Roberts, CEO of Link, told This is Money: ‘Our data consistently shows that people who rely on cash live in the most deprived parts of the country. But moreover, they are more likely to be digitally excluded.’

In June this year, the FCA was given new powers by the government to ensure reasonable access to cash withdrawals and deposits.

Under the rules, banks and building societies must consider whether local communities lack access to money services, such as branches and ATMs, and offer additional services where they identify ‘significant gaps’.

The deadline for submitting evidence to the Treasury Select Committee is 5pm on December 2.