IMPORTANT ANNOUNCEMENT: MyWalletHero is becoming The Motley Fool UK - click here to read more about our name change.

UK banks pledge to support access to cash

UK banks pledge to support access to cash
Image source: Getty Images.


As we shift seemingly relentlessly toward a cashless society, some cash-reliant businesses and consumers who have struggled to access cash have a reason to smile. Several top banks and building societies in the UK are now unifying behind a commitment to ‘protect access to cash’.

Here’s the lowdown.

What has been happening to cash?

The UK has been moving towards a cashless society for some time now. ATM usage, for example, has been declining at a rate of about 6% to 10% a year.

Covid-19 has supercharged this transition. During the first lockdown, concerns about virus transmission resulted in many people doing most of their shopping online or turning to cashless and contactless payment methods. As a result, cash withdrawals from ATMs fell by 60% compared to the previous year.

According to the Financial Conduct Authority (FCA), cash withdrawals were down 40% year on year in 2020.

Are there people and businesses who still rely on cash?

Yes. Many, in fact.

In 2020, an FCA survey found that five million UK adults still use cash for most of their purchases.

This includes the unbanked and those who have bank accounts but prefer to use cash for practical and personal reasons. An example is people in rural areas where inadequate broadband or mobile signals limit access to online banking.

Similarly, a good number of small businesses still prefer to use cash for their daily transactions.  

As the use of cash declines, there’s a risk that these people and businesses could be left behind.

What is the banking industry doing to support access to cash?

According to trade association UK Finance, banks and building societies have come together and made several key commitments to preserve access to cash for consumers and businesses over the long term.

Barclays, HSBC, Lloyds, NatWest, Nationwide and TSB are among those that have signed up.

The commitments include ensuring that cash remains available to the vulnerable, the elderly and small businesses.

David Postings, CEO of UK Finance, said, “The banking and finance industry is committed to making sure there is access to cash for those who need it as we recognise that cash is still an important way to pay for many.”

The banks have also committed to supporting projects that the industry is currently rolling out to support access to cash. These include the Community Access to Cash Pilots. This is a programme launched to trial and test different ways to enable people access to cash.

The chair of the programme’s board, Natalie Ceeney, said, “I welcome the commitment from the banking and finance industry to sustaining cash, and look forward to working with them, with regulators and government to finding a sustainable model for cash.”

What about the government and financial regulators?

It’s not just the finance and banking industries that are taking action to protect cash.

Financial regulator, the FCA, has also committed to the movement.

In a joint statement with the Payments Systems Regulator, the FCA said that it was “committed to ensuring that cash, and the infrastructure that supports it, remains available for those who need it.”

In last year’s budget, the government also promised to enact new legislation to safeguard the future of cash.

True to its word, it recently agreed amendments to the Financial Services Bill that will allow people to request cashback from retailers such as pubs, corner shops, and cafes without making a purchase.

Could you be rewarded for your everyday spending?

Rewards credit cards include schemes that reward you simply for using your credit card. When you spend money on a rewards card you could earn loyalty points, in-store vouchers airmiles, and more. The Motley Fool makes it easy for you to find a card that matches your spending habits so you can get the most value from your rewards.

Was this article helpful?
YesNo

Some offers on The Motley Fool UK site are from our partners — it’s how we make money and keep this site going. But does that impact our ratings? Nope. Our commitment is to you. If a product isn’t any good, our rating will reflect that, or we won’t list it at all. Also, while we aim to feature the best products available, we do not review every product on the market. Learn more here. The statements above are The Motley Fool’s alone and have not been provided or endorsed by bank advertisers. John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool UK has recommended Barclays, Hargreaves Lansdown, HSBC Holdings, Lloyds Banking Group, Mastercard, and Tesco.