Does Scotland have Freedom to Pay?

Even if a cash point closes and there are others relatively close by, there are still the same number of people wanting to withdraw cash but with fewer resources. The result of this is that the other cash points run out of cash over, say, a bank holiday, or out of £10 notes meaning they only dispense £20 notes which in itself means the shopkeepers need more change. Also the cash point I use now gives the bulk of its notes in £20 denominations presumably to counter the closure of the RBS ATM.

Hi Malcolm, we completely agree with the points you raise that access to financial services should be seen as a whole system. You’re right, it may well have less impact on some when bank branches or ATMs close in areas where there is a post office or cashback facility nearby. However at the moment, these systems all work in isolation, so when a bank decides to close a branch, or an ATM stops functioning, the issue of whether there are other local services that could provide cash are not fully taken into account. So at the moment, some people might have alternatives whereas others won’t. Also, cashback and post office branches can be brilliant, but they can also have limitations which might mean people are less likely to use/benefit from their services. We agree with you that access to cash should be looked at in a broader way, and are calling for one regulator to be in charge of the system as a whole.

Harry, one of the reasons that ATMs close is because of reduced use; there are not the same mumber of users; hence “clusters” will reduce. However LINK aims to protect ATMs where they are more than 1km from another.

Thanks Morgan. LINK do look at alternatives when “protected” ATMs are threatened and post offices offer most bank customers, including businesses, a range of services. They also often have better hours than bank branches.

Establishing a regulator and coming up with regulations can take a long time. I think Which? should help that process by also looking at constructive suggestions for how cash can be made more readily available, particularly for people who have never lived near a bank, ATM or post office.

In the intro we have Debbie’s comment which seems to illustrate an effective way with cash. Her business has a “circular” flow of cash – some customers pay in cash, some withdraw cash; the same cash is being recirculated. Could happen with a lot of businesses, I’d have thought, if they could feed cash back to customers – debit card for example.

As I keep suggesting, I believe we need to consider other ways to access cash as well as the “traditional” ones. These would benefit those very many people who have never had the “convenience” of a nearby bank, ATM or post office in England, Wales and NI, as well as Scotland. We have the opportunity to help a lot more people, not just to protect those who are already fortunate.

I made a couple of suggestions in other Conversation:

1. Self-service tills could be used as mini cash dispensers, since these tills are popular and appearing in small supermarkets.

2. More Post Offices be used as sites for ATMs. The Post Offices that have them are usually in built-up areas rather than those where it is a struggle to save cash.

Would it not be better to require banks to operate shared branches? In the early days of ATMs you had to use the one provided by your bank, but then the Link scheme was introduced to allow us to use ATMs belonging to other banks.

It has been regularly suggested.

The banks cooperated to give the post office part of that role – 11500 offer basic banking services to the vast majority of bank customers with more convenient opening hours. That is about double the number of bank branch closures in the last 10 years.

Where branches close but others remain open I see no reason not to move accounts; apparently it is easy to switch.

I don’t mind whether we have shared bank branches or the services are provided by Post Officers but planning is needed to ensure that these services are not then removed. ATMs be moved to Post Offices when bank branches close.

ATMs are commercial operations that cost money to purchase, install, maintain and supply with cash. The companies that own and provide them expect a return on their investment, partly provided by the interchange payments. If usage drops to such a level that they become uneconomic to run then they are likely to be removed, like any other commercial service. The options to keep them open then include a subsidy – higher LINK payments perhaps as are provided for “protected” ATMs – that we, as bank customers, will effectively pay for. LINK had no power to keep them open.

If they are regarded as a “social service” then are they something that should be provided out of the public coffers? National or council tax?

I do not see it as essential that we can always access cash 24 hours a day; nice, but we can organise our lives better than that, just as we do when we visit the shops, the chemists, fill our car with fuel…….. I think there are alternatives to ATMs that need exploring.

We also always seem to forget the millions of people who have never had convenient access to a post office, bank or ATM. I’d like us to give those “unfortunates” access to cash in a realistic way. Let’s think about the wider population.

When I was in my teens, there were branches of seven different banks in our local market town.I had an account in one which a few years ago closed — nearest branch in a town thirty miles away and which I have no reason to visit for other purposes. I didn’t close my accounts, but opening accounts in another bank seemed a reasonable course of action. By two years ago, because of amalgamations and closures, the number of banks in the town had been reduced to two. I was having problems with the bank in which my accounts were held locally, so to keep my options open I opened an account in the other remaining bank. A year ago it went to opening only two days a week and is due to close in January. It’s a mess. We can’t do business banking through the Post Office — they won’t accept significant amounts of money because they’re a small office. Occasionally we have to deposit significant amounts of money, often thousands of pounds in cash. Last week we banked almost £1000 in coin. We simply couldn’t have done that at a Post Office Counter. In addition, the fact that Post Office Counters will accept only full money bags means that we can never bank all our takings and that makes our accounting procedures very untidy.
Switching banks is no longer an easy option.

The interesting thing is that when most towns and even small suburban shopping parades had a range of banks, there were not many personal account customers compared with today when virtually everyone has a bank account. These local banks survived largely on commercial business, professional firms like solicitors and estate agents, and traders that dealt mainly in cash. Those needs still exist but the banking services that support them, have shrivelled up. Wealthy individuals enjoyed a close relationship with their bank manager and seemed to always be able to produce brand new notes.

Unfortunately, high streets and shopping parades no longer have a broad choice of independent shops and service providers. Alternative payment systems have made a big difference to the way in which people pay for their utilities and the personal service is no longer required.

“ The number of free-to-use ATMs is at an all-time high of over 54,000 and over 98% of all ATM cash withdrawals by UK cardholders in the UK are made free of charge. See more about LINK statistics here.“.

Some ATMs are a service provided by commercial companies and they need to recover the cost of providing that service, so charge. Most ATMs are free.

With no banks,all machines are in commercial premises, so no free cash!!

Many ATMs in commercial premises are free to use.

I believe many older bank customers do feel a genuine loyalty towards their bank. Granted, that probably doesn’t apply to today’s young folk, who’ve witnessed and felt the effect of the banks’ greed, criminality and incompetence. But older folk often fondly remember the days when their branch manager helped them out in some way, or had the time to say a cheery hello.

So it’s very real for some, and the problems Hazel illuminates are very real for many.

People may well stick with their current provider – I am very happy with the bank I’ve been with for many years, who as far as I know have not shown particular greed, criminality or incompetence. However i believe “loyalty” to be an illusion some people like to think exists. I believe it is inertia, happy with the status quo, on the customer’s side – but many these customers will stop using the branch, use ATMs less, abandon cheques because there are more convenient banking methods. No loyalty to their branch or local ATM.

And “loyalty” from a commercial institution is all about retaining your profitable custom, rather than personal sympathy. Probably the same in public organisations as well – do you get special treatment from your GP because you’ve been with them a long time? Why would long-standing customers receive preferential treatment over new ones?

Things change. We can’t reverse that so need to think openly about how best to adapt.