News in Brief

UK Parliament Debates Access to Cash

On 20 October the UK House of Commons had a debate about access to cash for nearly 90 minutes. 25 MPs spoke across every part of England, Scotland and Wales, including the Economic Secretary to the Treasury.

The Economic Secretary updated the house on progress made ensuring access to cash, including mention of the consultation on possible legislation to protect cash over the long term that closed on 23 September. He said, ‘that consultation was designed with a simple principle in mind: finding that crucial balance between supporting the use of cash and embedding flexibility as the cash landscape continues to evolve.’

He went on to say that as of the first quarter of this year, more than 95% of the population were within 2 km of a free cash withdrawal point. The government included legislative changes to the Financial Services Act 2021 to support the availability of cashback without a purchase from shops and other businesses.

The thinking is that new laws ensure that people need to travel only reasonable distances to pay in or take out cash and to support the continued use of cash in people’s daily lives, including supporting local businesses in continuing to accept cash.

The consultation also set out proposals on what sort of organisation should be within the scope of legislation to ensure that industry, especially banks, continues to play a key role in supplying cash, be it through their own branches or through funding customer transactions at ATMs or post office counters.

The government believes the FCA is best placed to play the leading role in holding firms to account on access to cash, so that the needs of consumers and businesses are met.

New Croatian ATM Regulations May Price Them Out of the Market

New regulations are being introduced to increase the protection and security of the 6,000 ATMs in Croatia. The increase in costs may be greater than the benefits these bring, meaning that many will close.

One of the new security measures is an electrochemical protection system which permanently marks and destroys banknotes in an attempted burglary. In addition, banks will face a significant bill to upgrade IT systems and ATMs when Croatia enters the Eurozone.

Banks are said to be asking the Ministry for the Interior for a compromise solution regarding the security measures.

Barbados Caps ATM Fees

The governor of the Central Bank of Barbados has announced that there will be a standard ATM withdrawal fee for transactions of $3 if the ATM is not of the corresponding bank of the issued debit card. Transactions using point-of-sale (POS) terminals will not incur a fee.

The governor said the goal is to standardise the interchange rate for Visa/Mastercard debit card transaction ‘to cushion the the impact of the increased fees on depositors and the business sector.’ Some charges are reported to have gone as high as $6.50 and some merchants were making charges for POS transactions.

Barbados is keen to reduce the use of physical cash and increase reliance on digital transactions, according to the governor. ATM and POS charges risk hindering achieving this objective.

Explosive Attacks on ATMs in Europe Down by Half

The European Association for Secure Transactions (EAST) has published a report covering the first six months of 2021, which shows a significant fall in ATM explosive attacks.

While overall ATM related physical attacks were up 2% (to 1,873 incidents), mainly driven by a rise in vandalism, ATM explosive attacks more than halved (to 241 incidents).

Losses due to ATM related physical attacks were €4.9 million, a 61% decrease over the same period in 2020. 35% of these losses were due to explosive attacks, which were down 58% €3.2 million.

A summary of the attacks can be found here (www.association-securetransactions.eu/atm-explosive-attacksfall-in-europe/).

Meanwhile the Dutch and German authorities have stopped an organised crime group who specialised in explosive attacks on ATMs.

The gang had produced tutorials on how to blow up cash machines using homemade explosive devices and were running training courses. The gang was linked to 15 ATM attacks in Germany with estimated damage and thefts valued at €2.25 million.

They weren’t always successful: in one test run of an explosion, one suspect died, with another seriously injured.

BSP on Track to Achieve 50% Digital Payments

The governor of the Bangko Sentral ng Pilipinas (BSP) has said that the volume of digital payments has increased to 20.1% of total average payments, up from 14% in 2019. With one in five payments now digital, the Philippines is on track to achieve at least 50% of payments being digital by 2023. Its other target is to have 70% of the population on board using the digital financial system.

The BSP said InstaPay transfers have now overtaken ATM withdrawals. InstaPay and PESONet transfers grew 484.7% in 2020. PESONet is a batch electronic fund transfer (EFT) credit payment scheme, which serves as an alternative to a paper-based check system.

A BSP report made the statement that digital payments have emerged during the pandemic as ‘vital and inevitable solutions’ to enable Filipinos to complete transactions without physical contact, therefore, reducing health risks. An interesting statement given the extensive research by central banks and others that surface transfers, including from banknotes, represent an extremely low risk.

BSP has also issued a statement that there will be no shortage of banknotes in the Christmas season. Demand is 40% higher for banknotes and 50% higher for coins in the fourth quarter and BSP is reassuring the nation that it is ready for this.