They were supposed to unite communities and support local businesses, but local currency schemes are losing favour with busy retailers and shoppers, it has emerged.

A growing number of retailers in Brixton, London, where the Brixton Pound was launched little a over a year ago, are no longer accepting the currency, because of the practical difficulties involved in banking it.

Tony Benest, manager of Brixton Wholefoods, said he would rather have "real" money in his till.

"It's probably more trouble than it's worth," he said.

Retailers in Lewes, East Sussex, where the Lewes pound has been circulating for three years, have reported similar gripes.

Sue May of May's General Stores in the town said enthusiasm for the scheme had waned in the past year. "We're a busy store so sometimes it can be inconvenient to go out and bank the pound. It's also lost momentum among shoppers.

"It's gone very quiet all of a sudden and we get only very few in the store each week now."

Josh Ryan-Collins, a founder member of Transition Town Brixton, which helped launch the Brixton pound, also acknowledged the scheme's limitations, but said that there were ways in which confidence could be restored. So-called "transition towns" could trade local products with each other. "Bread from Lewes could be traded for services from Brixton," he said.

Transition Town Brixton is currently working alongside the New Economic Foundation and the Social Trade Organisation to develop a digital platform that will work across the mobile phone network to make it easier for stores to bank the currency.

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