The Courier & Advertiser (Angus and Dundee)
UK cash system ‘needs government protection’
FINANCE: Review calls for legislation to ensure people have access to money
The UK’S cash system is reaching a tipping point and will collapse without legislation to protect it, according to research into how people access coins and notes.
Panel members behind the Access to Cash Review, which published its final report a year ago, said legislation is needed to protect cash for as long as people need it.
They said that in the 12 months since the final review, while some progress has been made, significant issues within the cash infrastructure remain.
The review was set up by ATM network Link as an independent body to understand consumer needs and implications for cash access requirements over the next five to 15 years.
It previously predicted that society would be at the point of being “virtually cashless” by 2035, with fewer than one in 10 transactions being made in cash.
But it said trade association UK Finance now expects the UK to hit this point within the next decade.
Panel members also pointed to figures showing that over the past year, 13% of free-to-use UK ATMS have closed, as lower levels of cash use have made them economically unviable.
A quarter (25%) of ATMS now charge people to withdraw their cash.
They also said the Post Office’s cash access service has come under serious threat.
Barclays recently reversed plans to stop customers accessing cash withdrawal services from post offices after a backlash.
Various initiatives have been set up by the industry to help maintain people’s access to cash, including cashback initiatives at local shops and a “request an ATM” service. But the panel said it believes the only way to manage the cash system is for the government to legislate and give regulators the tools that they need to protect cash access.
Banks should be obliged to provide suitable cash access to their customers, it argued.
Natalie Ceeney, independent chairwoman of the Access to Cash Review, said: “The UK is fast becoming a cashless society – without knowing what this really means for consumers or for the UK economy.
“Many people may want a completely digital future, but we need to make sure that this shift doesn’t leave millions behind or put our economy at risk.
“We welcome the positive initiatives from the banking industry and much needed co-ordination from regulators.
“However, commercial pressures on all businesses mean that we cannot rely on the status quo, and we can see serious strains emerging.
“Regulators currently don’t have the tools that they need to ensure that everyone who needs cash can get it.
“Now is the time for government to protect cash and allowing us to look ahead to how we can prepare for a digital future which includes everyone.”
Long gone is the time when cash was king. Technological advances in recent years have brought a revolution in how payments are made with everything from mobile phones to digital watches capable of completing contactless transactions.
The convenience of contactless payment systems and the rise of online banking services has led to fewer people carrying cash and fewer visiting bank branches.
The result has been a significant revision to the physical banking estate in Scotland and across the UK as a while, with extensive branch closures.
For many the changes have been a positive experience, giving them access to more data about the state of their finances and enabling them to take more pro-active choices about how they handle their money.
But for very many others – including some of the most vulnerable in society – the move away from cash is, and will continue to be, a hugely discomforting experience for those whom familiarity and routine is key.
The Access to Cash Review, which was set up by ATM network Link but operates as an independent body, has now called for legislation to protect the UK’S cash system.
It believes the system is at imminent risk of collapse and the government must act before it is too late.
The winds of change are blowing, but cash will have its place in society for the forseeable future.
If that means introducing new protections, then so be it.