UK Moves to Sustain Cash

The UK is facing significant pressure on its cash infrastructure, sufficient to put access to cash on the political agenda. 2021 draws to a close with a major announcement that some of the largest UK banks will create a network of shared banking hubs to maintain cash facilities for communities where cash services have ended.

The banks have agreed that any community facing the closure of a core cash service, such as a bank branch or ATM, will have its needs independently assessed by the UK’s major ATM network LINK. Communities will also be able to request a review of their needs from the summer of 2022.

Which?, the cash consumer group which has been campaigning in support of cash, has been monitoring bank branch closures. They report that in 2021 there have been 736 branch closures and that the rate has been accelerating; between June and August 298 branches closed. A further 220 are planned to close in 2022. Since January 2015 4,734 bank and building society branches will have closed.

The new announcement represents a collaboration between all of the UK’s major retail banks and is a result of the work of the Access to Cash Action Group (CAG). The CAG brings together those banks, Age UK, Toynbee Hall and the Federation of Small Businesses.

Action has already started in 2021 to address the impact of the closure of branches and ATMs. In the past year LINK has assessed most places where there have been branch closures. 11 are receiving free-to-use ATMs and up to five locations will have access to a shared banking hub. The Post Office has agreed to deliver new and improved dedicated cash services in up to 30 branches.

An example of other action taking place in the UK to support cash is an announcement by PayPoint to introduce cashback up to £50 in value in over 2,000 retail outlets without shoppers having had to buy something. These new locations are in addition to the 1,000 where this is already possible.

A year long trial was run in shops in four locations in the UK and over 24,800 transactions with an average withdrawal value of £27.81 took place, over £680,000 to date. The initiative started as part of the Community Access to Cash. The Financial Services Act 2021 had to include an amendment to allow cashback without purchase. PayPoint is the first member of LINK to make such an announcement.

Which? has welcomed the announcement but ‘will be watching closely to see the extent to which they prevent communities from losing access to cash.’ It also points out that the government will need to introduce legislation swiftly to underpin these measures.

The government has been promising legislation to enable access cash for as long as it is needed for some time.

The Bank of England is also taking steps to ensure the UK’s wholesale cash network is robust. The wholesale network moves new notes and coins from the issuers to the individual bank branches, Post Offices, ATMs and retailers.

Sarah John, the Chief Cashier, has asked industry participants to make measurable commitments by the end of the first quarter of 2022 that ensure ‘the provision of cash services to households and firms is underpinned by an effective, sustainable and resilient cash distribution network.’ The commitments need to include key indicators and criteria against which they can be held accountable.