New rules to protect free access to cash have been hard fought. Here’s how they will work
Rocio Concha, Director of Policy and Advocacy
| Which?
Which? has led the campaign to protect free access to cash. New rules, which come into force today, will help those who want to access cash do so.
The last time you used cash to make a purchase may have been some time ago. With a tap of a card, swipe of a phone or even a flick of the wrist, many of us now pay digitally for the vast majority of transactions.
It’s a wonderfully convenient way to pay for lots of consumers, but the reality is that millions of consumers still believe cash is king. These people, who may live in more rural areas or with disabilities, view physical money as not some relic of the past but an everyday essential. We know those living on lower incomes favour cash as means of budgeting for the week or month ahead.
But getting hold of physical cash has been made increasingly difficult in recent years. More than 6,000 bank branches across the country have shut their doors since 2015, along with hundreds of free-to-use ATMs. The consequences for many are long journeys to bank branches to deposit or withdraw cash.
To put the issue into perspective, 29 parliamentary constituencies - totalling nearly three million people - have no bank branches remaining. Another 57 constituencies are down to their last branch.
Over the past five years, Which? has led the campaign to protect access to cash for those who still want to use it. Our cash crusade has taken us from the doors of shuttered banks to 10 Downing Street, where in March 2020 we handed our petition calling for access to cash to be protected by law, signed by thousands to the government.
Last year, the previous government passed the Financial Services and Markets Act, which handed the financial regulator, the Financial Conduct Authority (FCA), the powers to ensure reasonable provision of cash deposit and withdrawal services for personal and business current accounts across the UK. Throughout the Bill’s passage in Parliament, we campaigned tirelessly to ensure it worked for the people across the country who needed it most, pushing for the law to be tweaked so it protected the free access to one’s cash, rather than being charged for it.
Today, the culmination of years of work bears fruit, as new rules to protect cash finally come into force. This means that those banks, which have been just focussed on commercial objectives in their approach to shutting branches or other places to access cash, need to pay more consideration to a local community’s cash needs before deciding to pull the plug on premises. Specifically, the watchdog will require firms to check whether additional services would be needed should a branch shut its doors or an ATM be switched off - and keep facilities open until the additional cash services are available.
New rules will also give local residents more say. Community groups will be able to request an assessment of whether there are gaps in local cash access, which the banks must respond to. Where significant gaps are found, providers will have to deliver reasonable additional cash services.
These additional services may include banking hubs, which are spaces shared between several banks and seen by many as the future of physical banking. Commercially, they’re a more attractive option for firms than keeping open individual branches, and these hubs will provide local residents with cash access as well as in-person services.
At present, the rollout of hubs has been much too slow for local residents to feel their benefits. Just 81 have been opened across the country, but many more will need to be set up given the number of bank branches that have closed.
Encouragingly, major banks have pledged to rollout 350 hubs by 2029. However, this would represent a significant increase in the pace of delivery - and consumers will be forgiven for wondering whether it’s achievable. To hold banks accountable, the Government must ensure firms stay true to this pledge.
Which?’s support of access to cash isn’t about rolling back the clock to a bygone era when it was the predominant way of paying. Nor is it about trying to halt the march of technological progress made in the payments sector. It is about recognising those who aren’t yet ready or able to make the switch to digital payments - and ensuring they’re protected. New rules today will do just that.
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