UK budget to introduce new laws to protect consumer access to cash

UK budget to introduce new laws to protect consumer access to cash

The UK is set to introduce new legislation to ensure customer access to cash, under measures to be outlined in this weeks Budget statement.

The closure of multiple ATMs and bank branches across the UK has raised fears that the access to cash system is on the verge of collapse.

Consumer group Which? has called on the chancellor, Rishi Sunak, to step in with new laws guaranteeing cash access for small communities in the forthcoming Budget.

Under the plans, which will be revealed in full on Tuesday, the Treasury is expected to start talks with the Bank of England, the Financial Conduct Authority and the Payment Systems Regulator about legislation immediately after the budget.

It is expected that financial watchdogs will be given the power to force banks to make cash available to people who still rely on it in a bid to stem the tide of closures.

A number of initiative are already underway to preserve the circulation of cash in small communities, including measures by Visa and Mastercard to extend cashback schemes to more high street stores, and the introduction of a £1 million fund established by ATM network Link from which cash-starved communities can draw in order to install a free cash machine.

Comments: (2)

A Finextra member
A Finextra member 10 March, 2020, 10:401 like 1 like

OK to see to that cash is available - but who will pay for the cash service? The majority society not using cash in the form of overpricied non-cash services ? "The banks" - i.e. shareholders who to a great extent are retirement pension instututes, in the form of reduced profits due to underpriced or even free of charge cash service? The cash users in the form of full cost cover service fees - unlikely? And how will challenger internet only banks - hailed by the authorities - deliver on this requirement since they have no cash distribution infrastructure quite in line with their "light weight" strategy? Or are the scorned "high-street" banks supposed to deliver 100% of this requirement? 

A Finextra member
A Finextra member 10 March, 2020, 14:50Be the first to give this comment the thumbs up 0 likes

The current demise of the UK ATM network is a direct result of the interchange cuts implemented by LINK in 2019. This artificial manipulation of the market has resulted in a catastrophic decline in the availability of free-to-use machines across the country. We are now being expected to believe that the answer to our cash access problem is through new, less efficient, and more costly solutions that will do nothing for consumers or retailers. In fact, many of the initiatives currently being promoted by LINK are designed to obfuscate whilst the banks continue to act to making it more and more difficult for consumers to access and use cash.

Let’s be very clear, there is nothing wrong with many of the new payment methods, but there is something intrinsically bad about celebrating the reduction in choice that the demise of cash would bring. Consumers have not turned away from cash as a payment option, but the actions taken by LINK and the banks are creating a self-fulfilling prophecy that will end with the UK sleepwalking into a cashless society, and over time this is something we will come to regret. It is time to put a stop to this situation and remind ourselves that the banks and LINK should be acting to serve the consumer. And consumers want to retain the option to pay and be paid in cash.  The best, and quickest way to ensure access to cash is protected is by withdrawing the second 5% interchange rate cut, and allowing the market to return to the delivery of free access to cash for all.