Is banks sharing buildings the way to save cash?
The virus has dealt a new blow to our notes and coins but one woman is mounting a fightback
ECONOMIC lockdown has dealt a big blow to those fighting against the drive towards a cashless society. Payment by plastic and mobile phone has become more popular than ever. But some hardy campaigners are determined to keep cash on the high street.
No one is battling more than Natalie Ceeney, author last year of an authoritative report on access to cash. She has just sanctioned the launch of eight ‘cash pilot’ schemes designed to test new ways of cash remaining available to consumers and businesses who prefer to use it.
On Friday, Ceeney, former boss of the Financial Ombudsman Service, told The Mail on Sunday: ‘ I am fighting for freedom of choice – giving everyone the right to use cash in addition to other payment methods. This is what the communities that have been chosen to take part in these pilot schemes want.
‘ Sadly, we cannot just magic back into life closed bank branches and axed cash machines, but we can find new ways to ensure cash i s s t i l l available in t he modern world.’
The pilots are expected to be up and running this autumn, with most testing the idea of a ‘shared’ bank branch – an idea long backed by The Mail on Sunday. Possibly situated in bank branches that have previously been closed down, customers and local businesses from all the major high street banks will be able to use them to withdraw and deposit cash.
If rolled out nationally, a network of such shared branches would cost the banking industry as little as £20 million a year to run. Banks currently spend £700 million a year keeping open loss-making branches and unprofitable ATMs. In March, the Government said it would bring in new laws to ensure banks continue to offer cash to customers.
Ceeney says: ‘Last week, the Government confirmed to me that it still intends to introduce legislation requiring banks to provide access to cash. Hopefully, our pilots will find the access solution.’
The new legislation follows years of encouragement by the banks for consumers and businesses to jettison cash in favour of online or card payments – ideally by swishing plastic over a contactless reader. The contactless payment limit was raised from £30 to £45 in April.
CARD payments are hugely profitable for the banks – with a retailer typically paying them 1.85 per cent of the value of any transaction to card providers. By way of contrast, cash handling – f or example, keeping cash machines full – is costly.
Communities that will pilot the shared bank branch idea have all seen their high streets become bankless in recent years. One of the eight is Ampthill in Bedfordshire – a market town that earned its name in a less than complimentary reference in the Domesday Book of 1086 as an ‘ant-infested hill’.
Barclays quit Ampthill six years ago and the site is now a Costa Coffee while NatWest shut three years ago. Its branch remains vacant and may become the home of the new shared branch.
Cameron Titchener is owner of sweet shop Sweet Sensations, a magnet for children wanting to spend their hard- earned pocket money. He says: ‘Nobody is fooled by what is going on – the banks are acting in an underhand manner, encouraging us to ditch cash for their own selfish reasons.
‘ This coronavirus crisis has played into their hands. It has frightened people into giving up money in favour of contactless payment. We must not let them take away the right to use cash and we should fight for its survival.’
In response to coronavirus, Cameron has overhauled his shop. He now has sanitised sweet trays, masks, screens and strict twometre social distancing rules. But he does not see banknotes and coins as a problem. It is a view supported by cash management association ESTA that says Covid- 19 is not spread on notes.
Cameron says: ‘As far as hygiene is concerned it is all about using common sense.’
Ampthill mayor Ian Titman applied for the town to be part of the pilot scheme – one of 21 communities that threw their hat in the ring. The 66year-old retired insurance broker says: ‘Look around Ampthill and you will see that just like any other small town, the shops desperately need all the support we can give them. Many people simply prefer to handle money and it is also cheaper for traders than having to pay for card payments. Hopefully, this scheme will be Ampthill’s saviour.’
Claire Woodend runs the Ampthill
Deli and Kitchen with assistant Flossie Friend. She is happy to take payment any way the customer chooses – cash, card or contactless. But she believes cash plays a key role in the financial education of youngsters – she has two children aged nine and 11 who have been studying at home during lockdown. Claire says: ‘Children need to handle money as it helps them learn about its value and it aids them with their maths studies. Older customers too are often insistent on
using cash. Access to cash should be a basic right. This crisis must not be used as an excuse to ditch cash.’
Some experts question the timing of the new ‘cash pilot programme’, branding it ‘ridiculous’.
Derek French is former director of the Campaign for Community Banking Services – an organisation that argued for shared bank branches in the early 2000s. On Friday, he told The Mail on Sunday: ‘Communities were asked if they wished to be part of this pilot scheme back in March before coronavirus swept across the country – with the deadline for entries being the start of June.
‘It is absolutely ridiculous to have held the application process during a global pandemic when people had far bigger and more important issues on their minds. Only 21 communities responding is a small amount compared to the hundreds adversely affected by the axeing of bank branches and cash machines.’ Over the past decade 6,000 banks have closed down – culling the network by a third – while in the last two years 9,000 cash machines have vanished.
French added: ‘I fear the pilot is being set up to fail because many of the large communities that have been hit hardest by the loss of access to cash missed the deadline.’
There are hopes the Post Office – with 11,500 outlets nationwide – can help support the cash pilot programme. At the moment it offers basic banking services for customers of Barclays, HSBC, Lloyds, NatWest and Santander. Barclays said it would no longer allow customers to withdraw cash at a post office from the start of this year, but a public outcry humiliated it into doing a U-turn.
The Mail on Sunday has long campaigned for the presence of a bank and free-to-use ATM in every town – see our manifesto above.