How CAN the banks charge shops simply for paying cash into their own accounts?
As drive to make us cashless gathers pace, we visit market town where angry traders ask...
SLOWLY but surely, a cashless society is being foisted upon us. We might not like it but it’s coming. Profitdriven banks are desperate to consign our banknotes and coins to history, leaving us with no option but to use cards and electronic payment systems for everyday purchases.
We know about the pain this inflicts on many shoppers. But it can have a significant effect on small retailers too.
In the picturesque market town of Saffron Walden, in Essex, such traders have been holding regular markets since 1141. Still smarting from the Norman Conquest just 75 years earlier, locals back in the 12th Century traded with pennies minted during the reign of King Stephen.
Fast forward almost 900 years and coins – as well as notes – are still being accepted by local traders, but it seems not for much longer. Retailers are being discouraged by the banks from taking cash.
This month HSBC raised its monthly account fees for business customers from £5.50 to £6.50 while increasing the charge for shopkeepers wanting to bank cash from 60p to 70p for every £100 of takings. Earlier in the year, Lloyds ramped up its charges, raising its fee for handling cash takings from 70p to 75p per £100 for bigger businesses. Smaller firms pay £1 per £100. Retailers still have to individually count and put each coin denomination into separate clear plastic bank bags.
To make matters worse a brutal cost-cutting programme by banks nationwide has seen more than 6,000 branches axed over the past decade – making it even harder to find somewhere to bank your cash.
THE COFFEE SHOP – ON YOUR BIKE!
THE trendy cafe Bicicletta Coffeecon-Velo offers a dozen cycle stands to encourage people to pedal there for coffee and cake.
Eighteen months ago it decided cash was no longer king – and told customers they now had to pay by card. This coincided with the closure of the town’s NatWest branch where the cafe deposited its cash receipts. Only a glass filled with coins for tips, next to the till, remains as a reminder that real money still exists.
It reminds me of a recent trip to Sweden where I found many shops in the capital Stockholm no longer accept cash. If we do not halt the move towards a cashless society in Britain we could end up just like Sweden within a decade – with only 15 per cent of the population still using cash and more than two million people who still rely on using money being isolated. Half the 1,400 bank branches in Sweden no longer accept cash.
Peter Moore, the bike cafe’s manager, says: ‘NatWest was charging us 70p for every £100 of change that we handed in. It may not sound a lot but if you are banking £20,000 a month this adds up to £140. It eats into already tight profit margins.’
He adds: ‘On top of this, we were spending a lot of time counting our takings and bagging coins up to be banked. Banks are clearly pushing businesses into becoming cashless to maximise the profits they can make for shareholders.’ The final straw, he says, was when NatWest deserted the town. Peter says: ‘We want to give our customers the choice but we also need to survive.’
THE GROCER – SPEND THOSE PENNIES
GROCERY store Blue Nature welcomes customers and their cash with open arms – unlike the high street banks that increasingly like to tell us how we all prefer to pay either online or by contactless card. As if they know. Store manager Hasan Derinyer points out that more than half of his customers prefer to pay in coins and notes.
While it is true debit cards are the most popular way for people to pay for shopping, a third of all purchases are still made by cash according to trade association UK Finance.
Natalie Ceeney, author of the Access to Cash Review, fears if banks have their way no one will be using cash in a decade. She says: ‘Banks have a social responsibility to look after customers and there is still clearly a demand from people to use cash.
‘Despite the claims made by banks, most people still want the choice of paying by cash for shopping. It is unfair that the banks are charging businesses to bank cash payments. It is a way of banks getting rid of cash by the back door.’
Retired librarian Iga Szmidt promptly hands over 76p for three locally grown organic tomatoes at the grocery store. Iga, 75, says: ‘For such a small amount it seems silly to pay by card.’ Hasan agrees. He says: ‘If you buy an apple for 25p by card, maybe 2p of that is gobbled up in charges. That is money our business loses that we need to survive. But the banks do not care. If we got rid of cash altogether I imagine their fees for card payments would rise even higher.’
THE BUTCHER – CHARITY NEEDS CASH
WHEN I mention cash to butcher Tony Kisielowski he immediately points to a pile of charity collection
tins behind the counter – including those for local hospice St Clare, Cancer Research UK and Marie Curie.
Tony, who works for family butcher Burton & Son, is angry at banks hurting good causes as a result of dissuading firms from taking cash.
Tony says: ‘We might charge £9.99 for a steak – and almost everyone puts the penny change into a collection tin. We collect about £100 a month in this way for worthy causes. Banks are greedy when they charge us for handling our own money but what really gets me is how they are hurting charities by taking away cash as a payment option.’ This unexpected pain inflicted by banks as part of their cashless society agenda is already being felt. More than 70 per cent of charities have seen a sharp decrease in cash donations over the past three years, according to the Institute of Fundraising – costing good causes millions of pounds in lost revenue.
THE MARKET – BANKS PUT PROFIT FIRST
A MOUTH-WATERING array of a dozen olive dishes – from Greek black ‘volos’ to greens stuffed with piri piri chillies – greet customers at the Borough Olives stall, set up on the town’s square.
Shopkeeper Mohammad Moshtagh believes the push towards a cashless society by banks is doing more harm than good. He asks: ‘What happens to those who do not use internet banking or have no bank account? How are they going to survive in this brave new world? Clearly the banks do not want their custom but they should be required to show a level of social responsibility.’
Natalie Ceeney is particularly concerned for the two million vulnerable people who rely on cash for their dayto-day needs. Without it they would struggle to survive – with many ending up as a burden on already overstretched social services with carers having to go shopping for groceries and paying bills on their behalf.
School assistant Rebecca Doe hands over a crisp £20 note – paying £3 for 150 grams of pitted green olives. The 50-year-old says: ‘I prefer to spend using cash because it helps me when budgeting.
‘The banks know full well it feels less painful paying by card, but at the end of the day they are only interested in making more money.
‘It is a disgrace small businesses are charged for taking out or depositing cash.’
The final word goes to Matt Dickinson, of trade body Federation of Small Businesses. He says: ‘Communities should have a right to choose how they pay for goods.’ Banks should not be forcing customers and businesses into a tunnel headed cashless. Have you been stung by the dash towards a cashless society? Email toby.walne@mailonsunday.co.uk