/ Money

Don’t close down cash now that we’re opening up

The warning lights continue to flash for the future of cash. Here’s why the government cannot afford to ignore them.

For the 5.4 million people in this country reliant on cash in their everyday lives, the story of dwindling access to it is a familiar one. When we surveyed over 2,000 people in July, more than half of them had encountered access to cash or banking issues. 

But it is the speed at which these changes are happening that is of most concern.

Our analysis of recent data from LINK, the UK’s largest cash machine network, revealed that the number of ATMs in service has dropped by almost 8,000 (or 13 per cent) since March 2020 and shows no signs of recovering now that the economy is opening up.

It isn’t just ATMs. Bank branch closures have also ramped up since the first national lockdown: 801 have shut their doors so far and a further 103 are earmarked for closure by the end of the year. 

A worrying trend

As we look to build back better from the pandemic, we cannot exclude certain groups of consumers, including those reliant on cash, from participating in the recovery. Encouraging cash usage also helps boost local economies since we know that those who take cash out are more likely to spend it locally.

Yet protecting access to cash is only part of the problem – the other, equally important, side of the coin is whether shops and businesses even accept it. Unless retailers can commit to taking cash as a payment method, ensuring reasonable access to it will hardly matter.

Our survey in June found that over a fifth of respondents had experienced cash refusal since March. A small number of shops have previously refused to accept cash due to the cost of handling it (security protection, paying people to count and deposit it). But many have stopped doing so during the pandemic amid confusion over how the virus spreads, or because they have shifted their business models online. 

However, data suggests that this reluctance to accept cash is happening against the will of consumers.

We found that over 80% of people thought that businesses and shops should continue to take cash, including those that don’t use it themselves. Businesses agree. A recent Post Office survey revealed that far from finding cash to be a relic of the past, two thirds of firms thought it was important to the recovery of the UK retail industry.

Our Cash Friendly pledge

Firms that can should state clearly that they will will continue to accept cash from consumers who still rely on it – as many have done by taking Which?’s Cash Friendly pledge.

The initiative is supported by organisations such as the Bank of England and British Retail Consortium, large retailers such as John Lewis and Aldi, as well as many independent shops and businesses across the UK. 

The government has proposed that the FCA becomes the lead regulator of the cash network. In this role, its responsibilities should extend to tracking levels of cash refusal to better understand the scale of the issue. If necessary, it should also develop solutions so that cash dependent consumers aren’t left in a position where they can’t purchase essential products and services.

The warning lights are flashing for the future of cash – and the government cannot afford to ignore them. 

Comments
Yvonne says:
10 November 2021

Banks use our money & pay us virtually no interest. At the very least I want to speak to a human & not deal with a machine to make financial transactions. They owe that to customers

Chris says:
13 November 2021

I think that stopping cash is to control us. I want to buy what I like, without it being recorded. They’re tracking our every move and it has to stop. It’s ironic that there’s a view that people that work in cash are on the fiddle, when it’s the card only companies with clever accountants who are on the fiddle.
There should be a cash machine on every high street and shops should not be allowed to refuse cash.
I couldn’t spend a penny of my birthday money at a big shopping mall last week as they were all card only ‘due to Covid’. Utter rubbish.

I am just a simple person from an Arab country, the victim of a fraudster in London

Catherine says:
15 November 2021

Banks are a law onto them selves.I would love to change to a local branch but worried that as soon as I do they will close.It’s all about profit with them not about the customer any more.

I don’t know how banks have been allowed to close up like they have, they’ve all got on the bandwagon, I don’t understand it at all, where are you supposed to take coins to bank into your current account, I never use ATM’s, I don’t like them, and have never used them, banks think they can do what they like, they’re just a law unto themselves!!

Jean – Most large towns have at least one branch of each of the main banks. Nationwide Building Society accepts coins for paying into members’ accounts. I believe it is possible to pay coins in to your bank account at a Post Office with a pre-printed paying-in slip but this service might not be available at all PO’s. I understand that betting shops are also receptive to coins.

Many large supermarkets also have machines which accept coins in return for a voucher for use in the store either to spend on goods or to redeem for cash at the service desk [but the voucher has to be used the same day and there is a 10.9% deduction for coin processing].

It’s even worse when your bank closes its branch after 50 years and tells you not to worry. What happened to customer care.

I still dont see how it’s cheaper for banks to pay back people who have been scammed out of their money than to pay staff to work in their branches. Communities need local banks that know their customers and comunities need local banks.

Monica Cunningham says:
30 November 2021

I complained when NatWest closed two branches near me, spoke to District Manager suggested that NatWest should have a branch at Bluewater, he though this was a good idea and would I us it, as I can get to Bluewater by bus it would suit me very well. this conversation happened about three year ago, still waiting for NatWest to open in Bluewater. Banks are useless only there for share holders!!

Hilary says:
30 November 2021

Banks used to serve their customers. Now they only serve themselves. Their call centre staff (often in far flung places) can answer standard queries, but if you have a problem that is non-standard they can’t help and there is nowhere else to turn. It’s the same with too many services these days. It’s alienating and dystopian.

Jadon says:
30 November 2021

I am dyslexic don’t get on with technology very well do not do internet banking I relay on cash all my life like car boot sale markets and fruit machines we need to save our cash

Dyslexia and related conditions can make it difficult for people to use websites and forms. Banks seem to be starting to recognise the challenges but I do not know if any of the banks considers how dyslexia could affect the ability of customers to understand the advice given to protect themselves from fraud.

CASH WITHOUT PURCHASE
https://press.which.co.uk/whichstatements/which-comments-on-link-cashback-scheme-being-rolled-out-to-over-2000-shops

”Which? comments on Link cashback scheme being rolled out to over 2,000 shops
1 December 2021
Gareth Shaw, Which? Head of Money, said:

“Everyone should have reasonable access to their own money without having to pay, so it’s good to see a cashback scheme rolled out to communities who rely on cash the most.

“Schemes like cashback without purchase have a role to play, but they won’t be enough on their own to plug the gaps in the UK’s fragile cash system……….

This seems a slightly negative response from Which? who, for several years, made no mention of the possibility of shops being able to dispense cash without purchase, but pursued a policy of just retaining ATMs and bank branches, both an inevitably dwindling breed. They also rather ignored the 11000+ post offices that now give out cash.

Our membership of the EU made this cash source impossible but now that restriction has been removed. The trial seemed successful and I presume rolling out to 2000 outlets will give us more information on how successful it might be if fully implemented. Were that the case, and businesses throughout the UK joined the scheme, then far more people would get access to cash than they ever could via ATMs or bank branches.

I see this as a very positive development for consumers and one to be embraced. We are not going to see any significant, or any, expansion in the ATM or bank branch network – that ship has sailed. So we need to think positively about proposals for new ways of giving access to cash.

Although I support access to cash I suspect that requiring retailers to dispense cash might actually encourage them to decline cash or hopefully provide an ATM, as our village shop does. In the same way that businesses are allowed to refuse cards they can refuse cash. The coronavirus pandemic has encouraged refusal of cash, encouraged by the unsubstantiated belief that handling cash presents a real danger of spreading the disease. It may be that essential businesses such as supermarkets are required to accept cash and dispense it without requiring a purchase.

Perhaps we also need some efforts to help people realise that cards can be used for small purchases as well as large ones. Having moved away from using cash for nearly two years ago, though I always carry a couple of £20 notes just in case. Cards are now accepted by more retailers than in the past. During the summer I bought an ice cream from a van and paid by card. When I visit the local micro pub I am brought a pint of beer and a card machine to wave my card or phone over. It’s much quicker than using cash. Only a few years ago I had been conditioned into believing that cash was best for small purchases.

I have only used a card to pay for drinks [without a meal] in a pub on two occasions and that was because I was getting a tray of drinks and didn’t want to deplete the cash in my wallet. I would normally expect to pay with cash for what I call ‘instant consumables’ in markets, cafés and small shops. I prefer to pay for everyday purchases with cash unless the establishment finds cards more convenient.

I think ‘cash without purchase is a good idea’. Only those traders who wish to provide that service will do so and presumably expect some benefit in increased turnover; running a sub-post office was never a very profitable operation but it brought people into the shop and led to impulse sales.

I don’t know why the Which? comment quoted by Malcolm refers to “cashback without purchase“; it is not ‘cashback’ because there is no spending requirement if there is no purchase. I’m not sure either what the UK’s “fragile cash system is; it still seems pretty robust to me and is holding up well despite current difficulties. It was demonstrated with the latest supermarket experiments that they had to provide a cash payment facility as a default for people who did not have a smart phone or wish to use a card. Even our local bus companies realise they cannot refuse to carry passengers who wish to pay with cash.

If we go to a shop to obtain cash without making a purchase, I presume that this involves using a card, John. Few retailers accept cheques these days. I don’t understand why it should be a problem using a card for small purchases if we are using a card to obtain cash. Maybe I have missed something.

I agree that cash should remain acceptable on buses and it’s about time that rules are drawn up to decide where businesses must take cash, even if they would prefer to do otherwise. Have businesses been clamouring to provide cash without customers making a purchase? Is there an incentive to do so?

LINK has an article on cashback without purchase and points out that the customer may be charged for the service, in the same way that some ATM withdrawals are subject to charge: https://www.link.co.uk/consumers/cashback-at-the-till/

I don’t believe there is a problem with using a card for small purchases, it’s just that I prefer to use cash – as many people have said in these Conversations, there is a greater sense of control with handing over cash and it is just as quick [if that is important].

If I wanted to get cash without a purchase from a shop I would expect to be asking for £50-100 and would not be surprised if there was a minimum of £10.

I suggested that the incentive for shops to provide cash without purchase is to increase turnover through impulse sales. It might also reduce cash-handling and banking costs. In a village or suburban shopping parade it could encourage customer loyalty.

A related issue that does affect a significant number of people is that it is hard to function these days unless you have a bank account and at least one card of some kind. ‘Cash without purchase’ does nothing to help people without a bank account and there is probably very little that can be done legitimately unless all their income is in cash.

An interesting House of Commons Treasury Select Committee paper dated May 2019 reported that the FCA estimated that there were 1.3 million people without a bank account of any kind and that Treasury data showed that there were approaching 7.5 million ‘basic’ bank accounts open in June 2018. See –
https://publications.parliament.uk/pa/cm201719/cmselect/cmtreasy/1642/164205.htm

I fully support choice, John, and my view has not been changed by the fact that I have virtually stopped using it. I understand the arguments for retaining cash as mentioned in your linked document, the Access to Cash report and other documents. These provide very good justification for keeping cash. In fact I think I am ahead of the game in suggesting that the government must insist that ‘essential’ businesses continue to accept cash. Recall that public reaction forced the banks not to phase out cheques.

I am certainly not opposed to cashback without purchase, as it has been named, but I don’t see many businesses using it without incentives.

Well, lets hope optimism triumphs over pessimism 🙂

I am optimistic that we will retain an appropriate number of ATMs to serve the needs of those who need access to cash.

Sadly we have lost one of the two ATMs from the Tesco store in town despite it being very popular. Predictably it’s sometimes empty. If one of the four machines at Morrisons had been removed instead, that might have made more sense.

It will be impossible to provide sufficient ATMs to serve everyone in the UK. They are appropriate in many, but not all situations. Therefore alternatives need to be provided, including post offices as we already have, for the many who will never be close to an ATM. That could seemingly be addressed to some very considerable degree by cash businesses dispensing cash. Indeed, if the scheme is successful they could serve the whole UK, in settlements large and small.

I hope we can agree that the aim is to expand convenient access to cash to as many across the UK as possible, by whatever means possible.

We will just have to wait and see what happens. Perhaps we can revisit the topic next year.

I feel sorry for small businesses that have lost local banking facilities yet need to bank cash, particularly coins. I suppose they could visit the Coinstar machine at a local supermarket and be charged 10.9% of the total value.

Businesses can deposit cash at around 11500 post office branches, as I understand it, according to this as one example.
https://www.metrobankonline.co.uk/business/ways-to-bank/products/post-office/

I wonder if this is new and if there is a daily limit to deposits. There have been comments from owners of small businesses in other Conversations.

Cash businesses will not, as far as I am aware, be required to dispense cash. I understand they will join the LINK scheme from choice. So I see no link between dispensing cash and not accepting cash.

We have (well, many of us) moved to using cards rather than cash for most purchases, including those of small value. However, many do not have or use cards, or want to use cards in this way, so I do not think we should see such use of cards actively “encouraged”.

To ensure we retain cash as a widely used form of payment, which most see as essential, we need to encourage people to keep using it, businesses to keep accepting it and outlets dispensing it as widely as possible.

I am not keen on promoting the use of cards any more than is sensible, a move that increases our vulnerability to system problems, gathering even more data on our habits and putting more money into the profits of the card providers (Amazon have drawn attention to this n refusing Visa cards).

I believe we should be fighting to retain ATMs except where there are more machines than needed. ATMs have proved to be a very successful way of achieving obtaining CASH WITHOUT A PURCHASE for many years.

Details a LINK initiative that has already helped communities with with access to cash via ATMs is described here: https://www.link.co.uk/consumers/community-request-scheme/
In some cases new ATMs have been installed and in others ATMs that did charge have been made free to use. A very positive initiative, and driven mainly by consumers, and one that has already been achieved.

LINK have been very successful in their initiatives to ensure ATMs are preserved within reason, in High Streets and where justified by demand. However, apart from exceptional cases, where they are little used they are expensive to install and maintain. Post offices offer good access to cash – the move to get over 11000 of them doing this outweighs the ATM closures (many of which were duplicates or fairly close together).

As we are not going to see uneconomic ATMs return, ATMs that we have stopped using, then we should look for sustainable alternatives.

Many ‘uneconomic’ ATMs remain in operation and free to use because they are ‘protected’ by LINK. Our local village shop has one and the business has the responsibility for filling it. I informed LINK that it was often empty and they said they would take action.

I assume that the LINK community initiative to remove charges from ATMs involved ones that were regarded as uneconomic.

Bus services often run buses that are near empty at times on rural routes but the companies make their profits on busy routes.

As I said earlier, LINK have been effective in preserving ATMs in particular circumstances. Their website explains what they do. I also suggested I do not believe there will be a widespread resurgence in ATMs, because of their capital and running costs unjustified by very little use.

Moreover, many people have never lived within convenient distance of an ATM. Whether in remoter areas of the countries in the UK or even in the suburbs of towns and cities. I hope that, if the roll out of businesses dispensing cash without any purchase is successful, these “neglected” masses will benefit from the new initiative.

https://www.chargedretail.co.uk/2021/08/18/thousands-of-retailers-set-to-offer-cashback-without-purchase/
https://www.independent.co.uk/money/cashback-at-the-till-service-being-rolled-out-to-more-than-2-000-shops-b1967375.html
https://www.retailgazette.co.uk/blog/2021/04/cashback-without-purchase-to-be-allowed-by-shops-after-post-brexit-law-change/

I like the unintentional humour: “… small local ships along the various high streets across the UK” 🙂

We will have to wait and see how successful the scheme is.

Our village has retained its ATM, due to local pressure. It should be the responsibility of all local councils to make sure residents continue to have access to cash in small towns and villages. My village is very popular with hikers and walkers because of its AONB status, many of whom will withdraw cash before visiting the local shop for drinks and snacks en route.

I have not used cash since Covid. The village shop positions the card machine so that only you have access to it, very convenient for contactless payments and protecting their staff.

The DWP have now extended the availability of cash from Post Offices for benefit payments for another year until October 2022, due to Covid, an essential requirement for the disabled, many of whom are unable to open bank accounts.

While the demand for cash remains constant, the BoE have pledged to continue to print it, but I do think it important that choice remains and is assured, at least within the foreseeable future.

I expect that many of us have stopped using cash due to the pandemic. I had stopped a couple of months before but coronavirus was certainly a major factor.

Anyone can contact LINK to suggest that an ATM is provided for their community: https://www.youtube.com/watch?v=6J1G49-A5NU&t=44s

I’m not sure how much of this is driven by LINK and how much by the regulator.

Beryl suggests that local councils should be responsible for ensuring that residents have access to cash, and I agree.

It seems to me that town and parish councillors – so prone to poking their noses into things that should be private or commercial matters – are very reluctant to take action on things that would benefit the entire community. Many of them do not even support their local shops and businesses and actually oppose their attempts to develop or extend their operations. This tendency has led to the loss of a large number of local shops and facilities including doctors’ surgeries, fuel stations, farm shops, sub-post offices, banks, telephone kiosks, pubs, and even schools in some cases. They also seem to have a tendency to oppose developments like sensible new housing schemes that would help to reinforce their township or village.

Not everyone has a card, and some who do can’t afford to use their cards for non-essential luxuries.
By not accepting cash, businesses are taking away the ONLY way some people have to pay for their goods/services.

Businesses may argue it’s to reduce the risk of Covid, but the World Health Organisation has confirmed that the risks from handling cash is no different than handling goods being purchased, or using a PIN pad.

If businesses are only accepting card, they must be able to afford the fees involved, despite Amazon, a multi-billion pound company, claiming they’re unable to afford the VISA credit fees.

But can businesses afford to lose customers when these fees could be avoided if they continue to accept cash?

But we the customers, can play this game. If some businesses won’t accept cash, we’ll avoid buying their goods or using their services.

A business can accept and decline whatever form of payment it wishes. At one time, many businesses refused cards and we have moved to some not accepting cash. Fortunately we still have the choice of how to pay for goods and services, but action is needed by the government. It has committed to maintaining access to cash but it must commit to cash being accepted for essentials such as food, clothing, fuel and a great deal more. That’s what is needed and simply avoiding businesses that insist on cash is unlikely to be effective now that so many customers are using cards.

It really annoys me that Covid is still used as a reason for declining cash because the evidence of transmission by cash is not there, as you have said, Seb.

I hope that that acceptance of cash will become an issue at the next General Election and that the parties will agree on the need. It does not matter if businesses that sell luxury goods insist on cards.

John marriott says:
2 December 2021

I have a small caravan club site and rely on caravanners paying cash. Often they need access to ATM s so it is vital that they remain in use. We can’t afford to use card machines and pay 2% for the privilege!
John M

Colin Stokes says:
5 December 2021

The big thing happening now is banks and building societies resorting to telling untruths, blaming covide 19 for limited service while using it to close branches eventually.