/ Money

All eight banks respond to our open letter

Varying timeframes of commitments to two vital industry cash schemes underlines the need for government action. Here’s why.

Last month, our Chief Executive Anabel Hoult wrote to the UK’s eight largest retail banks, giving them a two-week deadline to guarantee their continued membership of schemes managed by ATM operator LINK and the Post Office, both of which are critical to protecting current provision of cash withdrawal, until legislation on cash is introduced. 

Reassuringly, banks pointed to the importance of safeguarding the cash network for cash-dependent customers in their responses. There was also general agreement that both LINK and the Post Office have a crucial role to play in the short to medium term future, as well as affirmation to existing agreements.

However, all banks stopped short of explicitly committing to either schemes for the period until legislation is introduced, which is currently open-ended, largely due to the lack of clarity on the timing for the government’s plans to legislate.

As a result, we are concerned that the varying timeframes of their commitments underlines the urgent need for the government to act on its promise to introduce legislation protecting cash one year ago. 

Worryingly, the government is still to set out its vision for the future of cash, including the scope and timing of legislation to protect access.

So while we are encouraged that some banks have set out their commitment to both schemes covering a period within which they expect legislation to pass, without clear direction from the government on the future of cash, it is unclear how long that pledge can reasonably remain in place.

Unprecedented strain on the cash system

The cash system has been put under unprecedented strain as a result of the coronavirus pandemic, making the need for longer term protections even more pressing.

There is a real risk that if clarity isn’t provided shortly, irreversible damage could be done to the UK’s cash infrastructure in the interim. If even one bank was to withdraw support from either LINK or the Post Office, with the latter’s agreement with banks ending at the end of next year, widespread cash access will no longer be viable.

This could leave many of the millions of people who rely on cash in the UK struggling to access their money.

That’s why we are now urging the government to publish its vision for the future of cash. This must include the steps that will be taken to develop and introduce legislation at the earliest opportunity.

Comments

The fact that the banks are not prepared to support the request by Which? makes it very clear that pressure must be placed on the government to bring in legislation, on behalf of citizens of this country.

I very much appreciate all the effort Which? has put in over the years to help preserve access to cash but perhaps the approach should be to encourage its members and the public to take individual or collective action to push the government into action. I appreciate that Which? has to remain apolitical but the message would be the same whichever party is in power. There is greater urgency now that the coronavirus pandemic has made life harder for those who want to continue to use cash.

Patrick Taylor says:
17 February 2021

I am confused slightly –
” One week on, we wanted to thank the two banks that have – so far – responded to our calls, confirming their commitment to both schemes and in doing so, pledging their support to #ProtectCash for the millions of people in the UK who rely on it. ” Camilla Eason

” So while we are encouraged that some banks have set out their commitment to both schemes covering a period within which they expect legislation to pass, without clear direction from the government on the future of cash, it is unclear how long that pledge can reasonably remain in place.”

If I were in business and a junior came to me to explain some banks were for supporting, some for a period , and some ambiguous I would expect the person to give me the names and , to be honest the replies for me to read. Open letters argues open replies surely?

This article just irritates as it leaves all the relevant facts out. So if I wish to boycott or highlight a Bank who is worse than the others I cannot.

Please provide the details.

As we are expecting legislation I think it quite reasonable for the banks to be non-committal until they know what they are being asked to commit to.

I think it a pity that this sort of item https://www.which.co.uk/news/2021/02/all-eight-banks-respond-to-call-from-which-on-cash-access-is-it-enough/ neglects to mention relevant facts. Such as the way LINK are preserving the ATM network – ensuring they are no more than 1km apart if one is removed, or that there is another source of cash, for example. Such as the alternative initiatives being trialled for access to cash. It is as if they feel relevant positive information must be withheld in case it dilutes the case they try to make. Perish the thought.

I see no sign, nor reason, why the government should want to see the end of cash. Just how best to protect it. Too much depends on the use of cash, albeit in smaller amounts. There is, in my view, too much fear being created to drive a case forward rather than taking a constructive approach.

I would like to see all retail businesses being obliged to accept cards and all essential retail businesses (using the same definition as coronavirus legislation) being obliged to accept both cards and cash.

But those who insist on withdrawing cash should bear the costs of doing so without being subsidised by non-cash users, with banks imposing a fee for more than one cash withdrawal per month.

There is a strange conflict of evidence here. On the one hand, we are told that “the cash system has been put under unprecedented strain as a result of the coronavirus pandemic”, and yet we all know that the demand for cash has almost dried up and that many ATM’s are now overloaded with money. Indeed, the banks are delaying replenishment or actually removing quantities of notes because too much idle money is tied up in the vaults of the ATM’s. The minting of new coins of some values has been suspended and the printing of banknotes postponed.

As the picture at the top of this article demonstrates, the real problem is one of distribution; there are five ATM’s in the wall of a Barclays branch and no one using them whereas there are whole towns with just one machine and small towns and large villages with none except at a petrol station or a pay-to-use one in a convenience store.

I agree with Malcolm – there is something disingenuous about the way Which? goes about these campaigns.

The photo is of Barclays in Charing Cross Road, near Trafalgar Square. London has an ambundance of unused cash machines, which are decreasingly used given that most Londoners pay for everything with cards. The current distribution of cash machines represents demand in the 1980s and 1990s rather than current demand. But banks are not going to spend money relocating cash machines to other parts of the country, given that the rest of the country will follow London sooner or later and stop using cash.

I do not agree that the rest of the country will stop using cash. I think they will certainly use it in smaller amounts but for a significant number of transactions. Plenty of comments support that. However, ATMs are impractical for many situations. I hope the use of cash businesses and retailers recycling cash by dispensing it without a purchase will prove successful and could benefit far mor people at little cost.

NFH – You have politely, but doggedly, pressed the case for eliminating cash throughout these Conversations but so far I can recall you have not addressed the concerns of the hundreds of contributors who need, or want to use, cash for small outlays. I won’t recite the list of examples but they range from birthday presents to church collections, raffle tickets to a cup of tea at a social event – as well as other more serious transactions, of course.

I use cash in situations where I could pay by other means and wish to retain that facility. If traders and organisations in what we might call the peripheral economy want to stop taking cash, that is a different matter, but so far as I can see there are no compelling moves in that direction.

John, cash is not necessary for any of the scenarios you describe. Cash is used only because some demographics are stubbornly stuck in their ways and refuse to modernise. Most young Londoners manage to be 100% cashless.

Even for church collections, which is your most challenging example, I recently visited a non-British Roman Catholic church in London that had a contactless machine on the wall for collections. I have no doubt that sooner or later the Church of England will follow suit, but hopefully using handheld contactless machines with a way of quickly selecting the most popular amounts. It would be nice to maintain the tradition of passing something around during an offertory hymn rather than donating on the way out of church, even though some Church of England churches already have a collection box near the door rather than collecting during an offertory hymn.

You are mistaken to say that I have pressed the case for eliminating cash. As I said above, I believe that essential retailers should be obliged to accept both cards and cash.

In the less genteel areas of the UK, where supermarket trolleys are locked together for security, I’ve yet to see any trolleys that can be unlocked by card or smart device. You still need either a £1 coin or a physical clone of one. If you aren’t lucky enough to be given a suitable clone, some places can sell you them for £1, but it can be better to just keep a few £1 coins around.

I also like to keep a small stash of cash in case I need to pay for car parking with machines that only take cash.

It’s interesting that in a car park we used on one of our rare excursions to the coast last year the queue for the cash pay-&-display machine was quite long whereas the queue for card payment was only a couple of people. I can confirm that the people of Norfolk are generally reluctant to modernise because, as NFH says, they are “stubbornly stuck in their ways”, but that is what makes the county so appealing to people of all generations. Modernising is an option, not a requirement. I retired to my birthplace to get away from the pressures of metropolitan life.

If people wish to use cash that is a choice they should have. They are not “stubbornly stuck in their way”. That is simply a way of trying to impose a view rather than trying to understand why people choose to do what they do.

There are, of course, issues where a single view is or would be necessary. Going to decimal curency, driving on the left or right, Brexit. However, card payments, cheques, cash, online banking, physical branches, can all co-exist, particularly if sufficient numbers support them. It may, of course, come at a £cost.

Patrick Taylor says:
17 February 2021

There perhaps should be a running list of failed electronic banking incidents so this discussion is not conducted in a non-existent perfect world where card payments never go wrong, are never hacked and are immune to future advances to corruption.

The use of cards for contactless payments is getting to a level where the amount that can be used and the number of places it can be used make it so much more attractive target. When it happens, not if, I can imagine that a secure alternative will be much appreciated.

As someone who spent a decade telling customers that the four figure PIN was unbreakable I know Banks lie to staff and customers. And that any system made by man is almost certainly breakable provided the money is right.

The successful recently revealed break in by Russia to hundreds of the most secret and important Govt and company systems in the Western world shows this.

That’s the whole point Patrick. Money, itself, in notes and coins, has little value and gains it by what it represents to everyone. But, importantly, it is physically passed around. Electronic payments are made in the ether using monetary nomenclature. No one sees it move or handles it. Thus, if the electronics foul up or are interfered with, payments and receipts also fail. There is more scope for people to mistype and to misdirect electronic payments and more ways to extort it. Banks seem to have little control over fly-by-night accounts that scam and disappear.
It is true, that we could not function without modern banking and the various cards that go with it but the solidity of cash and its non-electronic usage, makes it a useful commodity for every day finance. It beats bartering for simplicity and allows those, not electronically connected, to spend and gather payments simply. It is only since the end of the last century that the electronic world has developed enough to make automated finance viable. Romans used coins and we all did until the credit card came along. Are we certain enough of our internet to predict that it will still be around for the indefinite future? I know the £20 in my pocket will be.