Access to cash is an increasingly important issue, given the sharp decline in cash usage since the onset of the pandemic earlier this year. With card payments becoming increasingly common year-on-year, the government is seeking ways to protect access to cash.

In rural areas, accessing cash withdrawal and deposit-taking services is more difficult than in urban areas. There have been widespread closures of ATMs and bank branches across the UK, according to Which?. Since 2015, 3,770 branches have closed (at a rate of around 55 a month). 13,800 ATMs have closed since 2018. The remaining ATMs are situated in small clusters in areas of high foot fall, such as transport hubs and shopping destinations, with 78% of all free-to-use machines within 300 metres of the next.

An increasingly cashless society is in danger of excluding millions of people, who rely on it for everyday payments and as a means of budgeting. According to the recent Access to Cash Review, 1.3 million people do not have access to a UK bank account. 2.2 million rely exclusively on cash. For most people, cash is still valued. 47% of the UK population believe that living in a cashless society would present real challenges. That’s 25 million people.

On behalf of the rural communities and community businesses that we represent, Plunkett Foundation submitted a response to HM Treasury’s call for evidence on Access to Cash on 25th November 2020.

We answered the following questions:

  • Policy decisions must be consumer-led, not motivated by commercial interests (which has brought about the closure of ATMs and bank branches)
  • Legislation must be “rural proof” and recognise the unique challenges faced by rural residents and businesses
  • Post Offices must be protected as replacements for bank branches for both individuals and small businesses
  • For retailers who operate ATMs, they must be maintained as an economically viable option through stronger regulation of interchange fees

  • This is a service only available to those with a debit card, so cashback should not be relied on as the single solution
  • Cashback could be a solution offered through local shops. In our 2020 Better Business report, we found that 46% of community shops offered cashback at the till
  • The government proposes to introduce legislation meaning that cashback can be provided without a purchase. Any legislation of this kind must take into account any negative financial consequences (e.g. through fees or having to acquire an appropriate EPOS system). Offering cashback must be made viable for small businesses
  • Providing cashback requires use of a card machine, which in turn requires a good broadband connection. This is still lacking in many rural areas

  • Ensure the long-term sustainability of Post Office branches which provide banking services
  • From our 2020 Better Business report, we know that the Post Office is valued and run by many of the community shops we work with – but it doesn’t always improve profitability, and the Post Office Local model can be challenging to run. Any new legislation must address these challenges, so that Post Office branches can continue to offer cash withdrawal and depositing services to consumers and businesses

  • Ensuring the acceptance of cash is key to ensuring that no one is unfairly disadvantaged.
  • Large scale IT outages for banks or VISA are not unknown; cash should be maintained as an alternative payment option to digital methods
  • If there are any plans to legislate on making cash acceptance obligatory, it must be ensured that cash acceptance is still viable for small businesses (e. they must be able to deposit it locally)

  • We agree that there should be a single regulator and that this responsibility should lie with the FCA