SEEKING NEW ANSWERS NOW CASH IS NOT KING
Banks aim to ensure no one is left behind
THE need to protect access to cash for the most vulnerable has never been more acute.
Cash usage has fallen dramatically during lockdown, with a report from banking industry body UK Finance showing cash use now represents less than one in four of all payments made, a 15% drop year-on-year.
But there are still millions of people who rely on cash and cannot afford, or are unable to access or use, new technology for their everyday finances.
It’s a complex situation. The cash system is run almost entirely by commercial businesses, and if there is no profit to be made they will pull out from the market.
Such a situation risks people being left unable to withdraw cash or pay with it.
The good news is there are initiatives that are developing ways to make the finance system work for all, which includes retaining cash.
Trials begin today on a pilot to find new ways of both improving access to cash and increasing a switch to digital in communities.
Following applications from across the UK, eight communities will be working with the banking industry to find sustainable solutions to keep cash viable for individuals and businesses.
This will include working with businesses so they continue to accept cash and can bank it at the end of the day.
The scheme also aims to ensure access to cash, working with local authorities so infrastructure is in place, educating people about digital forms of finance, and working with new and existing financial services firms to create innovative solutions for all.
Natalie Ceeney, chairwoman of the Community Access to Cash pilot, says: “Over the past decade we’ve seen a massive shift from cash to digital payments, and Covid-19 has accelerated that trend further.
“But we know that digital payments don’t yet work for everyone, and for many individuals and communities cash remains essential.
“The world is changing – we can’t just magic back our old bank branch and ATM infrastructure.
“Instead, we need to use innovation to develop new solutions as well as harness tried and tested approaches to meet people’s needs.”
Link, which manages the UK’s largest network of ATMs, is part of a scheme launched last October where people can request cash machines for their area – and many have been installed across the country.
John Howells, chief executive at Link, says: “We’ve seen a huge drop in cash use in recent months, but we’re beginning to see a small bounce back in usage as more shops open. Our own data shows that almost three quarters of consumers say they’ll use less cash in the next six months. “We’re also concerned that some shops may decide to stop accepting cash too.
“Every community should have free access to cash and no consumer should be forced to pay to access their cash, which is why last year we launched a community request and ATM scheme.
“We’ve installed machines right across the country, from Scotland to East Sussex.”
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We’ve seen a massive shift from cash to digital, and Covid-19 has accelerated it