Forcing businesses selling in-person goods and services to accept cash would create unnecessary “red tape”, the government has said.

The Council of Ministers confirmed it does not support a proposition lodged by Deputy Montfort Tadier calling for businesses to be required to accept cash because it “would impose unnecessary burdens on local businesses and increase the cost of trading”.

Deputy Tadier’s proposal hoped to make Jersey a “cash-inclusive island” and ensure “no one is left behind”.

But the government said it is “not supportive of legislation that may be inflationary to the consumer or risk business services not being available due to red tape and barriers to operation”.

“There are practical costs”

The Council of Ministers explained: “There are practical costs associated with different payment options, such as the need to manage a till, pay a member of staff to count cash at close of business each day, and purchase a safe to ensure that cash is kept securely.

“As with any business, such costs must be met somehow – either by reducing costs elsewhere or by raising prices. Businesses, therefore, make decisions on whether or not to accept cash based on a range of factors.”

The government pointed to evidence from LibertyBus director Kevin Hart, who previously stated that accepting cash cost the company £65,000 each year – meaning that the company took 72p for every £1 paid in cash.

Ministers explained that this is “even more relevant” when considering that Jersey’s retail, hospitality and service economy is primarily made up of small and medium-sized businesses, with 87% of wholesale and retail firms employing fewer than nine people.

The government noted that there are also costs, such as merchant charges, associated with accepting card payments.

“For example, a number of businesses choose not to accept certain card providers due to the higher processing fees,” ministers said.

“A general consumer trend away from the use of cash”

Nevertheless, the government highlighted that there is a “consumer trend away from the use of cash in recent years” due to the “convenience and flexibility of card”, which has resulted in a rise in contactless payments.

Ministers added that while UK Finance reporting identifies a decline in cash use, “there is evidence that this will stabilise at a durable baseline reflective of a segment of the population which continues to use cash for their day-to-day spending”.

The government acknowledged that “access to cash is good” and confirmed there are “no plans to cease supplying Jersey notes to banks”, but added that “evidence does not indicate this is a significant issue that warrants legislative intervention”.

The Council of Ministers, however, will not have the final say on the matter as Deputy Tadier’s proposition will be debated by the States Assembly – before a vote determines the final decision.