Sussex shop owner joins cash acceptance debate after being forced to go cashless due to bank closures

The new report follows an inquiry into declining cash acceptance and how it is impacting on the most vulnerable people in society.

A lack of action from the Government to tackle declining cash acceptance could lead to a two-tier society with the most vulnerable bearing the cost, the report by the Treasury Committee has found.

Monica Hardman, owner of Shoreham Knitting & Needlecraft, says she was forced to go cashless when all the nearby banks closed, including the one next door to her business.

She was part of a debate on the BBC's Today programme on Wednesday, April 30. She said her business, in East Street, Shoreham, is now completely cashless, and explained why.

Monica said: "Originally, we had six banks in our town and our own HSBC closed over eight years ago. I opened three bank accounts, one after the other, trying desperately to operate cash.

"Gradually, all these banks closed until, last year, we had none. A banking hub opened at the end of our High Street in March of last year. I looked at the situation again but decided that it was too dangerous.

"One of the reasons was it was too dangerous for a member of staff to walk down the road on a regular basis, a five-minute walk, carrying large amounts of cash."

Even when the shop was accepting cash, only about 25 per cent of sales were made that way, Monica pointed out. Now, for customers who really have no other way to pay, she said she has at times made an arrangement where a member of staff has paid by card and the customer has repaid them immediately in cash.

Katie Jones, owner of K Teas Cakes in Wolverhampton, was also part of the debate on Today. She said she prefers customers to use cash, although she accepts cards as well – she says she would lose business if she didn't.

She pointed out that she loses two per cent of any takings on card payments, 'an awful lot of money' for a small business.

"I think it is important that we keep cash in society," said Katie. "In my bank account, I can pay some money in without having to incur a fee.

"It's not just about my business, it is about our customers as well. Customers on low income need to be able to see what money they have, in their hand."

Monica said most people use debit cards and she is charged 1.37 per cent on debit card payments, while credit cards are under one per cent. Cash, if it is paid in, is charged at 1.5 per cent of the total value, she said.

Customers come from all over the south to visit the Shoreham shop, which has Rowan Flagship status. The business was started in 1972, when Monica moved to Sussex from the Cotswolds.

She started as Shoreham Knitting Machines, selling knitting machines as an agent working from home. Her first shop opened in 1977 and she took over the much larger, three-storey premises in East Street in 1983. At that point, the business was renamed Shoreham Knitting & Needlecraft, as it was now selling hand-knitting yarn as well.

A website selling yarns was launched in 1996 and this developed into a new English Yarns website in 2006, run separately from the shop but under the same roof.

Monica has always said her success has been down to changing with the times.

There is no current law covering acceptance of physical cash in the form of notes and coins but the Treasury Committee of MPs has been inquiring into whether there is a need for such regulation or a mandate.

When appearing before the committee, the Economic Secretary to the Treasury stated: "We have no plans to regulate businesses, big or small, to compel them to accept cash.”

Having heard evidence on the impact of declining cash acceptance on vulnerable communities, MPs on the committee believe there may come a time in the future when it becomes necessary for the Treasury to mandate cash acceptance, if those who rely on physical cash are not adequately supported.

Dame Meg Hillier MP, chair of the Treasury Select Committee, said: "The Government is in the dark on how widely cash is being accepted and that is completely unsustainable. We are at risk of a two-tier society where the most vulnerable bear the brunt and this needs to be a wakeup call.

"Our Committee has sought to give a voice to those groups which are at severe risk of not being heard by Government policymakers. A sizeable minority depend on being able to use cash and they must not be forgotten by Whitehall.

"As a society, we must avoid sleepwalking into a situation where cash is no longer widely accepted. This is the beginning, not the end, of our scrutiny of this issue. The Government needs to take this seriously.”