Calls for new laws to protect access to our money
Bank review group warning over drive to cashless society
BRITAIN’S cash system is reaching a tipping point and will collapse without legislation to protect it, according to research.
The Access To Cash Review, which published its first warnings a year ago, are concerned the country is “sleepwalking” into a cashless society and that there is a lack of action in terms of legislation required to protect cash for as long as people need it.
The Review previously predicted 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 Britain to hit this point within the next decade.
In June, Natalie Ceeney, the former financial ombudsman told The Herald there was a “political hiatus” which meant there was a “deafening silence” in terms of tangible action to prevent people from being left behind.
Now it says the current legislation is “inadequate” meaning regulators have no legal power to require banks to give their customers appropriate cash access.
Some of the “solutions” that would help, such as allowing consumers to use the cashback facility in shops more widely without having to make a purchase, cannot be done under current UK law.
They also said the Post Office’s cash access service has come under serious threat. 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 brought in by LINK.
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.
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 this shift doesn’t leave millions behind or put our economy at risk.
“Regulators currently don’t have the tools they need to ensure 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 allowing
for a digital future which includes everyone.”
Now the panel she leads says that in the last 12 months while some progress has been made, “significant issues” within the cash infrastructure remain and there has been a failure to bring in laws to protect the public.
In November, The Herald revealed that ministers refused to intervene in the access-to-cash crisis while around 10 free-to-use ATMS were continuing to shut down every week in Scotland in the previous year.
Cash machine and bank branch closures have fuelled fears that “cash deserts” are being created, particularly in rural and deprived parts of Scotland.
The latest warning comes as SNP’S Ronnie Cowan, the Inverclyde MP, raised concerns with John Glen, the economic secretary to the Treasury about record numbers of cash machines charging people up to £2 just to get their cash out – particularly in less affluent areas.
An analysis conducted in the area revealed to The Herald shows that more than one in three ATMS charge to get cash out.some 29 out of 81 cash machines tested from Greenock and Port Glasgow to Gourock, Inverkip and Wemyss Bay deducted between 95p and £1.90 from customers to take out cash.
He has told Mr Glen in a letter: “I believe this is a stealth tax which is adversely impacting some of the poorest people in society.”
Pointing out that Greenock town centre was judged by the Scottish Index of Multiple Deprivation as the most deprived area of Scotland, he added: “It’s evident that my constituency requires support and making them pay to access their money is counterproductive. What is required is financial support for areas such as Inverclyde to help people make ends meet.”
He said: “I am aware of funding which is available for communities to improve access to cash and payment services. I hope to be able to work with local partners to make a submission for funding in-order to improve said access.”
In January, the Herald revealed that one in four of Scotland’s cash machines were now charging customers to take their money with the number soaring by 68% in just one year.
According to data from LINK, the UK’S largest cash machine network there were 1396 pay-to-use ATMS in Scotland at the end of last year – 565 more that the previous year. It means nearly one in four ATMS in Scotland now charge people to withdraw their cash.
On top of that, the rate of loss of freeto-use cash machines in Scotland rose to 14 every week in the year. That’s up from one in 10 in the year to July.
There were 4470 non-charging ATMS at the end of November – with 743 disappearing in a year.
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 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.
It argues the only way to manage the cash system is that banks should be obliged to provide suitable cash access to their customers.