End of cash? Banks given deadline to back scheme to protect access to money


Campaigners are urging the UK’s eight largest retail banks to publicly commit to maintaining cash access for the millions of people in Scotland who still rely on it.

Banks and building societies have been give two-week deadline to confirm that they will continue membership of two vital industry schemes which protect the viability of cash withdrawal and basic banking services for millions of people.

In a letter to the banks, Anabel Hoult, chief executive of the consumer organisation Which? outlines how the coronavirus pandemic has exerted enormous pressure on the cash network, and calls for immediate action to safeguard access to money to ensure that cash remains a viable payment option.

The move has been supported by former financial ombudsman Natalie Ceeney, author of the Access to Cash review who said the banks and regulators should step in.

Last week research showed that over 2m Scots have been refused payment with notes and coins during the pandemic, threatening the viability of the cash network.

The Which? study warned of a cash network in danger of crumbling revealing that 30 per cent of Scots reported being unable to pay with cash at least once when trying to buy something since March, when coronavirus restrictions were first introduced.

Legislation – promised by the Government in the New Year – would guarantee “widespread geographic access to cash” and a minimum number of “withdrawal points” in towns and villages, protecting access to cash and wider banking facilities in the UK.

But the consumer organisation said the “slow pace of progress” towards legislation has created a “dangerous vacuum”, in which cash machine and bank branch closures continue apace with little scrutiny or oversight to ensure the changes meet the needs of consumers as well as business.

 The end of cash? Two million Scots struggle to pay with coins and notes during pandemic

“While potential alternatives to mitigate these closures have been proposed, such as cashback without purchase from shops, the speed at which they are being developed and rolled out simply is not quick enough to stem the losses to the existing cash network that show no sign of slowing down,” said Which?

“In order to prevent yet more damage being inflicted as national restrictions continue, we have given firms a two-week deadline to confirm that they will continue membership of two vital industry schemes in the interim period until legislation comes into force, with a regulator in place to ensure that it delivers for cash-reliant consumers.

“These voluntary schemes are managed by LINK and the Post Office – both of which currently act as vital guard rails for the UK retail banking system, protecting the viability of cash withdrawal and basic banking services for millions of people. If one of the major retail banks were to withdraw their membership, neither would be viable.

“This would mean that LINK’s financial inclusion programme, which is designed to improve access to cash for the most vulnerable and deprived communities, would be under threat, while consumers who live in areas where the Post Office is often the only remaining source for accessing cash would be forced to travel much longer distances to withdraw their money.”

Data shows that more than one in ten of Scotland’s network of cash machines have been shut down at a rate of over two a day as the number of cash withdrawals has plummeted during the pandemic.

 Scots pay £10m in a year for the privilege of access to their cash

More than 600 have been shut between November 2019 and September last year, with hundreds more believed to have been temporarily shut because they are located in premises that were closed due to Covid restrictions.

Analysis produced exclusively for the by the consumer organisation Which? in October revealed that nearly half (47%) of the over 1000 bank branches which were open in Scotland five years ago will have shut by next year.

Ms Ceeney said: “I strongly encourage the banks, and regulators to support this call. Although many of us are comfortable with digital payments, cash remains essential to millions. But our current cash system is very fragile, held together through voluntary agreements which could fall apart at any time. If the banks withdrew from the LINK or Post Office agreements, we would be likely to see the end of our free-to-use ATM network, and the most vulnerable, as well as many small businesses, would be left without a place to do their basic banking. Cash is too important to be left purely to market forces. We need the banks and regulators to step up now and commit to tangible actions to protect cash, and we need supporting legislation from government urgently.”

Data provided by LINK, the UK’s main cash machine network, revealed that the number of ATMs dropped from 5,866 in November, last year, to 5,239 in September. There were 4022 free-to-use cash machines across Scotland while 1,217 charge – meaning that in one in four of the nation’s ATMs you have to pay to get your money out.


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