Major Review Calls To Protect Cash As Use Declines

Money-The Access to Cash Review has published its final recommendations calling on the Government, regulators and banks to act now or risk leaving millions behind. The review concludes that digital payments don’t yet work for everyone and around eight million adults (17% of the population) would struggle to cope in a cashless society.

The Review’s action plan to protect cash access calls for:

Government and regulators to step in urgently to ensure cash remains viable

A “Guarantee to Cash Access” for all, including those in remote and rural areas

Those providing essential services to be required to allow consumers to pay by cash

A more efficient, effective and resilient wholesale cash infrastructure to ensure that cash remains viable as its use declines.

Cash is only used for three in every ten transactions, down from six in ten a decade ago and is forecast a fall to as low as one in ten transactions within the next 15 years. This shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure which currently costs around £5 billion a year to run.

As bank branches and ATMs continue to close, the economics of handling and accepting cash will lead to an increasing number of retailers to go cashless. Given these pressures, the review warns against leaving access to cash to market forces, and urges the government and financial services regulators to take action to ensure cash remains viable for as long as people need it.

Natalie Ceeney, Independent Chair of the Access to Cash Review: “There are worrying signs that our cash system is falling apart. ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines. In Sweden, we were repeatedly warned to plan now because once infrastructure had gone, putting it back was close to impossible. If we sleepwalk into a cashless society, millions will be left behind. We need to guarantee people’s right to access cash and ensure that they can still spend it.”

“If we want to protect cash, we need to innovate, not preserve the past in aspic. Why can’t we get cash at local shops, through cashback, as well as at ATMs? Why can’t we support small businesses by letting them deposit their cash in lockers or smart ATMs rather than face the security risks and costs of a weekly trip to their bank branch? There is huge scope for innovation, not just in digital payments but also in cash.”

“We need leadership of this critical issue from our regulators and government, but success will rely on banks continuing to properly support their customers who rely on cash.”

Nicky Morgan MP, Chair, Treasury Select Committee: “The publication of this report marks an important milestone, and it’s clear that the hard work for policymakers must start here. The complexity of this issue cannot be overstated, but the simple truth is that leaving the future of cash to be determined by market forces will not work.

“This report contains the rigorous, evidence-based analysis that is required to get to the bottom of this issue. It is now for policymakers to pick up the mantle and bring about the changes required to secure long-term access to cash for those that need it. Tinkering around the edges to preserve the status quo will not work. It’s clear that something more fundamental is needed.

“This report sets an expectation that the Government, the regulators and industry will respond with a plan of action. I support this approach and consider that it would be highly negligent for those parties not to provide a considered response”.

The review gathered evidence from more than 120 organisations from across the leisure, retail, financial, charity and business sectors. It also travelled the country, taking evidence from thousands of people including workshops in places including Shetland, Porthmadog, and Bournemouth to understand the current needs of consumers and groups across the UK. The review also explored the lessons learned from Sweden and China.

In its interim report ‘Is Britain ready to go cashless’ the review identified approximately eight million people who would be left behind. The risks to people include:

Viability of rural communities: where broadband and mobile connectivity is poor, and where the local cash infrastructure is reducing. 

Loss of independence: for people who currently rely on cash for informal support.

Rising debt levels: for those on tight budgets, using cash helps to stay out of debt.

Financial abuse: cash can give independence in a difficult or abusive relationship.

Poor paying more: denied access to goods and services which can be bought online or via direct debits, or even given reduced access to the high street as shops and cafes go cashless.

The panel will meet again in September to discuss the impact of the Review and to assess whether further action is necessary.