Cash remains essential for many in the UK, even with the rise of digital transactions and fintech altogether. The figures speak for themselves.
In 2021, cash made up 15% of all payments. ATMs, especially the free-to-use ones, are the main channels through which most people get their hands on physical money.
It’s clear: “It’s important that everyone has a good choice of how to make payments, in ways that work for them.”
Who’s in Charge?
The oversight of cash access in the UK isn’t left to one organisation. Multiple regulators and authorities work together. One such collaborative effort is the Joint Authorities Cash Strategy (JACS) group.
They look after everything related to the UK’s cash infrastructure – “including cash production and distribution, bank branches, retailer cashback and shared Banking Hubs.”
The Financial Conduct Authority (FCA) plays a pivotal role here. With the recent Financial Services and Markets Act 2023 (FSMA 2023), the FCA’s role in regulating cash access has been affirmed.
On the ground, the PSR plays a vital role too. They regulate LINK, the UK’s biggest ATM network, making sure it “meets people’s needs.”
Monitoring Cash Access Points
Keeping a close watch on cash access points across the country is important. Current data shows that a significant majority of the UK population isn’t too far from cash.
“95.1% of the UK population live within one mile of a cash access point, and 99.7% within three miles.” But there’s still work to do.
There are places where access isn’t as smooth, and efforts are on to correct this.
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New Fines for Banks
The scenario is about to get even more strict for major banks. The UK government is stepping in, planning to set out new rules.
The simple message for the banks is clear: “Provide free access to cash withdrawals within three miles of consumers and businesses or face fines.”
If any bank fails to abide by this rule, the FCA will have the authority to impose fines. This move ensures that “Personal current account-holders would not be allowed to face hidden fee charges for withdrawing cash.”
Why This Rule Now?
The finance sector has seen many changes over the years. Thousands of bank branches have closed since the 2008 financial crisis.
With the dominance of digital services, the shift away from cash has been swift. But this doesn’t mean that everyone’s on board. Many still depend on cash.
The fear is real – without guaranteed cash access, “those in vulnerable groups face being cut adrift.”
Exploring Solutions
There have, however, been efforts to fill the cash access gap. Shared access to banking hubs is one such initiative.
These hubs allow customers from different banks to access banking services. The City minister, Andrew Griffith, visited one such hub in Brixham, Devon.
But challenges remain. One question that comes up is, “How the new three-mile rule would apply to rural communities across the UK?”
Public Voice
It’s not just the authorities who are raising concerns. Nigel Farage, the former UKIP leader, has been rallying against the reduction in cash services by banks.
His efforts have gathered momentum, with “hundreds of thousands of signatures for a petition” against the dwindling bank services.
Banks now have to be more careful about offering cash services. The goal is to find a balance between digital payments and cash.
We’ll see how well this works, but all in all, the decision should always allow people to use their money in any form they want.
