A coalition of businesses, charities and consumer groups have joined forces to issue an open letter to Jeremy Hunt, Chancellor of the Exchequer, urging for the protection of cash as a critical payment method for both consumers and businesses.
With the Government currently consulting on its Future of Payments Review, the signatories of the letter - including the PRA, Association of Convenience Stores, the Federation of Small Businesses and NoteMachine - are calling on the Treasury to ensure that cash remains part of the payments mix of the future, given its continued importance to the financially vulnerable, digitally excluded and small businesses.
Signatories acknowledge the Government’s recent release of its cash access policy statement as a positive first step, but emphasise that a more comprehensive effort is required to ensure the robust funding and safeguarding of the UK’s cash network.
As the Financial Conduct Authority (FCA) proceeds to implement the Government’s plan for cash, the signatories call for a concerted focus on maintaining maximum payment choice and future-proofing of cash as a payment method, through ensuring the ATM network receives the funding it needs.
Steve Makaritis, chief executive, NoteMachine said: “As the UK’s cash and banking infrastructure faces significant pressures and consumers deal with the rising cost of living, now is the time for the Government and the FCA to use this Review and recent legislation to help maximise payment choice for businesses and individuals, maintaining the diverse payments landscape we need well into the future.”
The coalition explains that despite the evolving landscape of digital payments, cash remains the second most widely used payment method in the UK, accounting for a substantial 15% of all payments. As the cost-of-living crisis escalates, cash has become an essential tool for budgeting, allowing for greater financial control and flexibility.
However, the viability of the UK’s cash infrastructure is under threat due to bank branch closures and successive reductions in funding for the free-to-use ATM network, which comprises nearly 80% of the country’s cash machines.
Since 2018, 14,400 free-to-use ATMs have vanished from communities throughout the UK, and an additional 37,000 now face the imminent risk of closure or conversion to pay-to-use machines. This trajectory not only jeopardizes the role of cash in future payment systems but also endangers the financial inclusion of vulnerable populations. While the Prime Minister’s recent endorsement of the free cash network is encouraging, the devil will be in the detail in terms of how the Government and FCA implement its plans for cash.