The numbers don't add up: universal provision of access to cash called into question

The numbers don't add up: universal provision of access to cash called into question

The UK's Treasury Committee has called for urgent action to prevent the collapse of access to cash as ATM numbers drop and bank branches disappear from the high street.

The Treasury Committee's intervention follows a report earlier this week by consumer group Which? calling for the appointment of a new regulatory body to guarantee continued provision of cash to disenfranchised communities.

New figures obtained by Which? show cashpoints disappeared at a rate of 488 per month between June 2018 and December 2018 with over 250 free-to-use machines also closing monthly - due to changes in the way the UK’s cash machine network is funded.

Which? is concerned that the double blow of cashpoint and bank closures - with more than 3,300 UK branches closing since 2015 - is leaving communities struggling to access the cash they rely on.

In evidence to the Treasury Committee, Charles Randell, chair of the Payment Systems Regulator, said that the whole system of access to cash needs to be looked at afresh.

Randall agreed that there is a need to guarantee access to free-to-use ATMs, "but with changes to the way people are using cash and contactless payments affecting the economics of the cash distribution industry, we need to have a debate this year about whether access to cash should be a universal service, rather than a commercial one."

Nicky Morgan, chair of the Committee says that the PSR's statement should set alarm bells ringing.

“It’s clear that the whole way that people access their cash via ATMs is starting to fail," she says. “Mr Randell suggested that there is a serious discussion to be had this year about whether access to such a basic financial service should be universal, or commercially driven.

“With the way that people access their cash seemingly on the precipice of collapsing, the Government can’t just bury its head in the sand. This mustn’t fall through the gaps of responsibility - the Government and regulators should get a grip of this problem before the whole arrangement collapses.”

In a separate session, Stephen Jones, of UK Finance told the Committee that measures to give account names the same importance as account numbers and sort codes when transferring funds under the Confirmation of Payee system would be unlikely to come to pass until "some time next year".

Considered an imp0rtant provision in halting the rise of authorised push payment scams, the move would force banks to delay payments when the recipient's name does match.

While the PSR had suggested a July enforcement date for the initiative, Jones told the Committee that the system would require a complex change in bank IT and processing systems.

"This is a big change at a time of a lot of change," he told the committee.
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Comments: (6)

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 14 February, 2019, 13:20Be the first to give this comment the thumbs up 0 likes

Fresh from scandals involving mis-selling securities, rigging interest rate and foreign exchange rate benchmarks, money laundering, exorbitant overdraft products, and the government bailout for ill-advised mortgage lending and involvement in risky securities tied to home loans, banks appear to be working to deprive consumers of access to cash.  Cashlessness would force consumers and businesses to use electronic currency.  It would make consumers and businesses entirely dependent on banks and eliminate privacy of financial holdings and transactions -- all while setting the stage for Negative Interest Rates where banks would charge for holding deposits. Cash is the only protection consumers and businesses have against the dangers of such an environment.

 

Melvin Haskins
Melvin Haskins - Haston International Limited - 14 February, 2019, 16:351 like 1 like

There seems to be a lack of understanding by both government and the banks regarding money. The money in a bank account is owned by the individual or business. In return for looking after this money, the banks get to enjoy the use of it and are able to lend it at substantial mark up over the rate of interest (if any) paid to the individual or company.

It is unreasonable for the bank to either make it difficult to withdraw your own money, or charge a fee for withdrawal.

However, both of these scenarios are now happening. By significantly reducing the number of branches and ATM's the banks are trying to force people to use debit cards which, of course, incur fees to the banks.

Given such poor interest rates, time to start stashing large amounts of cash under the bed, or somewhere similar. At least you then have unlimited access.

Jim Wells
Jim Wells - Wellspring Consulting International - Fort Lauderdale 14 February, 2019, 16:44Be the first to give this comment the thumbs up 0 likes

@Melvin Haskins - could not agree with you more.  Banks are granted licenses to serve the financial needs of the public.  Regulators need to ensure that they act accordingly rather than act like the public exists to serve the financial needs of banks.

Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford 15 February, 2019, 08:59Be the first to give this comment the thumbs up 0 likes ...and with a debit card, you have immediate access to spend that money virtually everywhere....
Melvin Haskins
Melvin Haskins - Haston International Limited - 15 February, 2019, 09:11Be the first to give this comment the thumbs up 0 likes

Cash seems to work virtually anywhere too and does not need an internet or telephone connection.

Matt Scott
Matt Scott - RenovITe Technologies Inc - London 15 February, 2019, 11:02Be the first to give this comment the thumbs up 0 likes

There is a lot of focus on Cash Withdrawal - what about Cash Deposit?  By reducing Bank branches, it leaves behind communities and Businesses without a local facility to Deposit - and leave behind ATMs often do not support Deposit in Through-the-Wall (TTW) ATM Devices. 

 If there is a continued commitment by Banks to reducing Branches there should be a National investment in a Shared Infrastructure to support Smart Multi-Function Devices (MFDs) capable of supporting Withdrawals, Deposits and other Branch-equivalent customer actives that are still required by these rural communities.