Access and Acceptance - the two Crucial Cash Issues that Require Legislation in 2019.

Posted on: 30/08/2019

Two news items yesterday focused on access to cash.

One was the Access to Cash Report of the Scottish Affairs Committee of the UK Parliament.

This comprehensive report came up with the following main recommendations:

* The Government should seek a commitment from banks that they will not close the last bank in town and if banks refuse, the Government should consider all measures, including legislation, to ensure communities still have access to vital banking services.

*The Regulation of bank branch closures should be strengthened.

*LINK should stop cutting interchange.

*The government should set up a working group to facilitate the introduction of cash-deposit taking ATMs around the UK.

* The government should broker conversations between the Post Office and banks to ensure Post Offices can provide full banking services.

* The government needs an overarching strategy for access to cash.

I fully support the recommendations of the Scottish Affairs Committee. Indeed, in some respects I would go further.

So while the Committee contemplates legislation  being required to safeguard access to cash, I believe that legislation is also required to ensure cash is accepted for payments. Put plainly, I believe that all businesses which accept in-person payments must be legally required to accept cash.

The two pieces of legislation are needed now, in 2019 - and I will be putting huge pressure of the government and all relevant regulators to ensure such legislation comes into force.


Turning to the second news item, which the Cicero PR Agency neatly arranged to appear the same day as the Scottish Access to Cash Report, this featured LINK, the UK ATM Network “pledging” to safeguard access to cash in communities around the UK.

Of course, every time LINK makes an announcement these days,  the preamble invariably includes reference to “the rapid decline in cash use in the UK”.

Then again, since overall convenient access to cash in the UK has been declining for years, it is hardly surprising that cash use would decline.

Now you may think that it is odd that I state that overall access to cash has been declining for years, since, at least until two years ago, ATM numbers had been steadily increasing.

However, it is important to remember that bank branches have been important sources of cash - indeed, 50 years ago they were the ONLY source of cash.

And what has happened to bank branches?

We have lost at least 50% of them in the last decade.

The other source of cash that has constantly declined over the years has been pay packets.

50 years ago, the majority of workers were paid in cash weekly. Now only a tiny percentage of the labour force receive their remuneration in this form.

So two of the three significant sources of cash in the UK have declined over the years. Only ATMs, the third source, have been on the increase.

Naturally, those organisations which benefit from a decline in cash use were not going to be happy at the steady increase in ATM numbers.

Here there are strong similarities between the UK and Sweden, the poster-child of the “cashless conspiracy”.

In both countries, those running the ATM networks - in the UK, LINK, in Sweden, Bankomat - are faced with reducing funding from the banking community.

Now everyone understands that banks need to save money where they can. However, there is a strong feeling among the public that enough money has been saved through branch closures and that ATMs should not be under threat.

In any event, however good the management teams at the two networks are - and they are excellent - the reduction in resources is forcing them to work to reduce the number of ATMs.

In Sweden, busy ATMs are being removed - and the same is happening in the UK, with the extra element on our Small Island being that thousands of ATMs that have not been removed have switched to charging for cash withdrawals. 

For most members of the UK public, if an ATM switches to charging, they won’t use it. So it might as well have been removed.

Yesterday’s news from LINK was a “pledge” to maintain access to cash, either at ATMs or from Post Offices, in 6500 communities around the UK.

According to LINK, they have arrived at their 6500 figure based on the number of communities which have 5 or more shops.

Why 5 or more shops? The obvious answer is that LINK want to limit the guarantee for cost reasons. For most members of the British public that is unlikely to be accepted as the most important criteria.

My own formula for the provision of free-to-use (FTU) ATMs - and access to cash - is very different.

I believe every community in the UK with over 1000 adults in residence needs a FTU ATM. Those communities with 2000 or more adult residents need two FTU ATMs - or, if there is Post Office, one 24/7 FTU ATM, augmented by access to cash at the Post Office counter.

How many ATMs would my formula mean we need in the UK?

This is simple to calculate.

There are at least 50 Million resident adults in the UK.

Therefore to provide one FTU ATM per thousand adults means that at least 50,000 FTU ATMs are required. However, allowing for factors such as tourism, a safer number of ATMs to ensure everyone has convenient access to cash would be between 55,000 and 60,000.

This is between 10 and 20% more FTU ATMs than we have today. So not a massive increase - but certainly one that is vital if access to cash is to be maintained and even, in some areas, improved

As I noted earlier, we need action in now, in 2019.

I do not believe the public can rely on pledges, however well intentioned.

The British public deserve Payment Choice. It cannot be right that those who want to use cash are steadily having access to their preferred payment method reduced.

Over to the government!


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