/ 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. 


HSBC bank streatham hill
Already Shut down,went to Brixton branch last week was closed until further notice due to a leak upstairs,same leak happened last year,don’t know if will open again?we don’t bank online If you phone them nobody seems to answer phone, my husband is a pensioner we depend on cash and to check our statements I have to travel to get Balham ST now Very awkward to get there, what is the government doing about it?it is people like us and many others who have to suffer.

Do you have a nearer post office, Susan? They will dispense cash and give routine banking services. Three are listed in Brixton.

It is now hard to find a bank that will operate a charity account. There are legal issues with setting up an account, which limits choice of institution. I belong to a charity which uses Barclays, but now the local branch has closed and the next nearest does not open on a Saturday, which is the only day that the treasurer can get there. The next one is a fair few miles away in a big shopping centre and has a very long queue on Saturdays. The distance and lack of local Saturday provision proved very problematic when we needed to change the signatories mandate and the bank demanded that the new people went in in person with their ID. It is a nightmare getting any bank to take cash deposits. They don’t seem to want to provide any sort of service at all for accounts that are not the run of the mill, they just want to get the “easy” accounts.

j pett says:
14 December 2021

People should be free to pay however they choose, not forced to use a card on phone or whatever.

I think non-essential businesses should also be free to choose how they accept payment. I don’t doubt that most will see that not accepting cash will damage their takings. Those that refuse cash presumably have balanced the pros and cons and will accept the consequences.

The government is going to have to act to ensure that essential businesses do continue to accept cash. I foresee a great deal of debate about what is an essential business.

Whether or not it is VAT-exempt or zero-rated might be a good starting point.

From the 2019 Access to Cash review: https://www.accesstocash.org.uk/media/1087/final-report-final-web.pdf

“Our fourth recommendation is for government, regulators and the industry to make digital inclusion in payments a priority, ensuring that solutions are designed not just for the 80%, but for 100% of society. We recommend action by government, regulators and industry to work together to solve specific consumer needs, using inclusive design approaches to ensure that the solutions designed really do meet needs. We also recommend that this remains an ongoing priority, and not a one-off activity – and work continues until digital payments really are an option for everyone.”

It’s easy to say that everyone should be able to make use of digital payments, but what about the vulnerable and others who could be at risk of losing their money at a time when there is so much fraud?

The report also says the following:
Our second recommendation is to take steps to keep cash accepted, whether by a local coffee shop or a large utility provider. Although the arguments for legislation are tempting, we have concluded that they are unlikely to work if they are pushing against commercial incentives. Instead, therefore, we have concluded that the best way to preserve consumers’ ability to pay with cash is to make it affordable for retailers, charities and service providers to accept cash, to ask utility and monopoly suppliers to ensure that they will access cash (whether directly or through a partner) as well as to remind suppliers of their wider societal responsibilities to meet the needs of vulnerable customers. We recommend a programme of new work, and targeted technological innovation to take this forward (such as deposit-taking ATMs and ‘smart safes’), led by government and regulators.

Our third recommendation is to call for radical change to the wholesale cash infrastructure, moving from a commercial model to more of a ‘utility’ approach, which will keep cash sustainable for longer. Our cash infrastructure was built for an age of high cash volumes. It is a far higher cost infrastructure than is required today. We recommend that the Bank of England convene a group to redesign this model, making it both more resilient and lower cost. The lower cost of a redesigned cash infrastructure will make it more tenable for the banks to provide free consumer access to cash for longer.

Which? News reports more action on banking and cash https://www.which.co.uk/news/2021/12/banks-announce-access-to-cash-solutions-but-are-they-enough/
These seem sensible and progressive proposals that recognise while changes take place various options need to be put in place. Shared banking services have been regularly discussed here, as well as the role of post offices and cashback without purchase.

LINK have looked after the ATM network successfully in the past and are a good candidate to coordinate what goes on (Which? describe LINK wrongly as an ATM operator; they are not, the operators are banks and other commercial organisations. LINK is the network.)
”LINK takes up new independent co-ordinating role to continue to protect access to cash

I have been trying to find out what additional services will be available from the Bank Hubs compared with Post Offices. Hopefully there will be a personal service that is divorced from people buying stamps, paying car tax and delivering parcels. There is no reference to bank hub on the PO website. Which? mentions “…solutions such as ATMs, shared banking hubs, and enhanced Post Office services” suggesting the possibility of different levels of provision to match local needs.

It is encouraging to see strong recognition of the needs of the public rather than simply allowing banks to close branches for commercial preferences.

Essentially “BankHUB” provides a dedicated private space for basic banking transactions and advice, whether within a post office or not. They seemed very successful for both personal and business customers, particularly the latter depositing cash.

It is good to see that these pilot schemes were organised and supported by major banks and the post office. When individual bank branches become little used it makes sense to group banks together.

There are different solutions that partly depend on the available facilities and the size of the community. Smaller communities will benefit from cashback without purchase where there is no post office, bank or ATM and where their provision is not viable. They proved particularly popular with poorer people because the amount withdrawn could be precisely tailored to need, something ATMs do not offer.

It will be interesting to see how the results of these pilots will be translated into permanent schemes across the country. Progress inevitably requires change and a mix of traditional bank branches where demand is sufficient, ATMs that are well used, post offices with banking facilities, together with banking hubs and cashback seem a good mix for the future.

The final report of the Community Access to Cash Pilots can be read here https://drive.google.com/file/d/12FjYQOpSKOqbhU3Em-_DEMrCjOcnSfHE/view

At present there is no mention of BankHUBs on the Post Office or Link website, which is not helpful for those who would like to see what services are on offer.

At least we seem to be moving. in the right direction.

So far these have been pilots. The document I linked to has full details of the pilots and locations.

LINK say ”As a result, LINK has determined that the following new services will be provided, with further announcements to come in 2022:

Shared banking hubs in Acton (West London), Brixham (Devon), Carnoustie (Angus), Knaresborough (North Yorkshire) and Syston (Leicestershire) – building on the experience of the existing hubs piloted in Rochford, Essex and Cambuslang, Glasgow”………..

I am well aware of that, but if you are going to launch a service users need to know what it offers. At least the shops offering cashback without purchase are shown on the Link website and they offer the same service.

As far as I can see the service is not yet being launched nationwide but more trials are being set up, as the LINK statement implies. As with the original pilots I expect that the communities involved will see the necessary publicity of the services they can access.The results will, no doubt, determine just what services are appropriate and required if and when a general implementation takes place.

We will have to wait and see. One of the reasons I’m not keen on using Post Offices is they refuse to accept payment of cheques into an account without a paying-in slip, even if you have the account name, sort code and account number. Friends have experienced the same problem. Maybe we could see more flexibility in future.

Your bank will supply you with paying-in slips and envelopes. The cheques are sent to your bank by the post office to allow them to be cleared. Cash, of course, does not have to be cleared.

Paying into my own account is not the problem. I’m involved with various charities and sometimes have to deal with cheque donations for them. It’s not really worth getting paying-in books. For years banks have had blank paying-in slips at their counters.

Thinking back to when I used a shared bank branch I was able to use blank paying-in slips there.

There may be a banking system reason why the post office requirement is necessary. Perhaps, @gmartin George, Which? could find out?

A local Post Office could not give a reason and my enquiry via the website was ignored.

Jo Andrew says:
30 December 2021

If we continue to rush headlong into a “cashless society” I foresee a crash not unlike the sub-prime market fiasco. In both cases it is the idiocy, greed and lack of foresight of the supposedly clever yuppies in the banking sector. A cashless system is a massive UK security headache. We need the two systems to run side by side. Aren’t we always being told to back up our own systems? Cash is a necessary safety system. Anyone we rub up the wrong way, be it the Russians, Chinese or the Americans can easily pull the plug on our digital banking systems, or at least knock it out for a few days to cause maximum fright and chaos. Also by keeping both systems it will encourage more investment into the UK as a safe haven as is the case now. And please don’t let our government throw money away on Bitcoins. I’m sure the younger Treasury boffins are already excited by the enormous Bitcoin hub in the States and want a piece of the action. These fads come and go. What happens when the top players in Silicone Valley die and some incompetents take over? Or we pass some laws that the Americans don’t like. Remember the TTIP agreement that the EU nearly ratified? We would have been thoroughly clobbered. We must remain as independent as possible and not beholden to anyone.