Cash system ‘is on brink of collapse’ after race to shut ATMs and banks
BRITAIN’S cash system is on the verge of collapse, a report reveals today.
Cash machine and bank closures are just the tip of the iceberg, it says.
The country’s entire ‘cash infrastructure’ – the system for handling and banking money – is increasingly at risk of ‘falling apart’, the review claims.
It is too expensive to run and people cannot get access to cash because bank branches and ATMs are closing down.
The review warns that millions would struggle to cope if the UK moves too quickly towards going cashless. The elderly, disabled and vulnerable face losing their independence, while cash shoppers would have less choice and could have to pay more as a result.
The independent Access to Cash Review, commissioned by ATM provider Link, wants ministers and regulators to guarantee that all communities will have access to cash as long as they need it.
In its final report, published today, the panel of consumer and industry experts has proposed a range of solutions, from forcing banks to reinstall cash machines in ‘ATM deserts’ to making it easier for customers to order cash by post, as is often done with foreign currency.
Other ideas include introducing lockers where business owners can deposit cash out of hours and giving convenience stores incentives to offer cashback. The report also calls on the Post Office to boost its services for small businesses and introduce automated deposit machines.
The experts warn that without action, Britain is at risk of sleepwalking into a cashless society within the next 15 years. A decade ago, cash was used for six out of ten
‘We need to innovate’
transactions. Today the figure is three in ten and it could be as low as one in ten by 2034.
Yet while most adults have a debit card, for around eight million people cash is not a choice but a necessity. And life without cash would be problematic for 25million people in Britain – nearly half the population.
Some small businesses and tradesmen, for example, still do not accept card payments, particularly in rural areas where broadband and mobile connectivity is poor.
The review says that under a proposed ‘Guaranteed Access to Cash’ measure, communities would be able to bid for extra ‘cash services’, funded by the banks. This might be an ATM if there is no longer one within a certain distance, or access to cashback from a local convenience store.
Last month Money Mail revealed how Lloyds Bank is testing a new scheme where it pays shops such as newsagents, greengrocers and butchers a small fee to offer customers cashback. It is understood that other banks will follow suit.
Almost two-thirds of Britain’s bank branches have closed over the past 30 years, according to consumer group Which?
Natalie Ceeney, independent chairman of the review, said ministers and regulators such as the Bank of England, Financial Conduct Authority and Payment Systems Regulator, ‘urgently’ need to step in.
‘There are worrying signs that our cash system is falling apart,’ she said. ‘If we want to protect cash, we need to innovate, not preserve the past in aspic.’
Gareth Shaw, of Which?, said: ‘This review’s recognition that the system is on the brink of collapse should be an urgent wake-up call.’
Eric Leenders, managing director of personal finance at industry body UK Finance said: ‘The industry supports the recommendations in this timely report, which reinforces our view that cash remains an important payment method for many people.
‘The current cash supply infrastructure needs to adapt to consumers’ changing cash usage and we are actively considering how this should be achieved.’
MONEY MAIL gives a stark warning today that Britain’s cash system is on the brink of collapse, leaving the elderly and vulnerable struggling to cope and potentially forcing small shopkeepers out of business.
Mass closure of local bank branches and ATMs is a large part of the problem. But the fact that store chains, public transport and even pubs are moving rapidly towards cardonly systems is also a huge factor.
A decade ago, six in every ten transactions were in cash. By 2034, that figure is expected to be as low as one in ten. While this may be convenient for big business, for many consumers the cashless society is a truly daunting spectre.
A review recommends that banks should be forced to re-install cash machines and convenience stores incentivised to offer cashback. This would certainly help but only if accompanied by a wider action plan.
For millions of people, using cash is not a choice but a necessity. Their needs must not be sacrificed just so banks and major retailers can make even larger profits.