We’re urging the UK’s eight largest retail banks to publicly commit to maintaining cash. This is my open letter to each of them explaining why.
FAO: HSBC, Lloyds Banking Group, Nationwide Building Society, NatWest, Santander UK, Barclays, TSB, Halifax.
In recent years we have seen seismic changes in retail banking and the UK’s cash infrastructure. The innovation that has allowed millions of consumers to enjoy the convenience of contactless payments and 24/7 access to their bank account via the mobile phone in their pocket has benefitted many.
It is clear, however, that cash is still an important lifeline for millions of people across the UK, with our latest research finding 10 million people are not ready or able to give it up. As you will be aware from your own customers, many older or more vulnerable people rely on cash as a means of budgeting or managing payments.
Worryingly, COVID-19 has placed unprecedented strain on the cash system that was already perilously close to collapse.
We welcome the industry, regulators and government reaching consensus to take action on the UK’s slide towards a cashless society that risks financially excluding these people – culminating in the Chancellor’s commitment in the 2020 Budget to legislation.
However, a year on, there is a very real risk that the cash network could fail before legislation arrives, with many ATMs and bank branches continuing to close across the UK without clear assurance that the changes truly meet the needs of consumers.
This can be easily prevented. There is a real opportunity to guarantee the stability of the existing network while discussions around legislation continue. In particular, major banks can continue to support the ATM and Post Office banking networks, which are critical to protecting current provision of cash withdrawal and basic banking services for millions of people across the UK.
The collapse of these networks will make it extremely difficult and, in some cases impossible, to reintroduce access to cash in some communities.
Urgent steps must be taken to ensure that irreversible damage is not caused to the cash system until longer term protections are agreed. As such Which? is calling on the UK’s eight largest retail banks to publicly agree to:
Continued membership of LINK, until legislation is passed and until a framework to protect access to cash has been implemented. This will ensure that both the Financial Inclusion and Protected ATM programmes will remain in place and will also guarantee the existence of LINK in the interim.
Continued membership of the Post Office Banking Framework, until legislation is passed and until a framework to protect access to cash has been implemented. This will ensure that the Post Office remains a viable back-up for communities that continue to lose ATMs and physical bank branches. It is clear that there is a large role for the Post Office to play in securing future access to cash, particularly in rural areas. As such, the Banking Framework must have guaranteed support and buy-in from industry until a long-term solution is in place.
These measures are not the antidote to all of the issues with the cash system, but they are critically important to secure the existing infrastructure in the interim.
The industry undoubtedly has an important role to play in developing a framework for a responsible and sustainably managed transition to digital and I urge you to recognise that banks’ individual commercial decisions can have a profound impact on the wider cash ecosystem.
Your public commitment to both the Post Office and LINK will bring much needed stability to the cash system while long-term solutions are put in place. I look forward to receiving your responses in the next two weeks.