Spring Statement 2018: role of cash and digital payments

The Spring Statement included the announcement of a call for evidence to better understand the role of cash and digital payments in the new economy, in order to keep pace with changes in the ways that people pay for goods and services

Cash has fallen from being 62% of all payments by volume in 2006, to 40% in 2016, and is predicted by industry to fall to 21% by 2026. It represented only 15% of the total value of consumer spending in 2015.

The Treasury said the consultation seeks to gather evidence to inform the debate about the move away from cash, by exploring how the government can support digital payments and ensure that the ability to pay by cash is available for those who need it, whilst cracking down on the minority who use cash to evade tax and launder money.

It will look at how the transition from cash to digital payments impacts on different sectors, different regions and different demographics. It is seeking both domestic and international evidence of what the government can and should do in this area.

The consultation will consider barriers to the adoption of electronic payments, including charges, and will consider whether the current denominational mix of coins and banknotes should be changed. It will also explore the issues around counterfeit coins and notes and also the use of cash for money laundering and to avoid tax.

The consultation closes on 5 June.

Cash and digital payments in the new economy is here.

Report by Pat Sweet

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