High Streets Initiative · 27 July 2018

Review opens to assess decline of cash payments on small businesses

card payments
Around 3.4m consumers barely used cash last year

As Britain drives further towards a cashless society, an independent review has opened to evaluate the impact of digital payment methods on consumers and business owners.

The Access to Cash review, opened by the LINK network of ATMS, will assess the impact of digital payment methods, such as contactless, over the next five to 15 years and propose an action plan to protect those dependent on cash.

In 2017, the 13.2bn debit card payments made in the UK outstripped the 13.1bn cash payments, according to UK Finance, as the convenience of contactless payment and prevalence of digital payment technology saw cash fall behind for the first time.

The banking trade body estimated that 3.4m people barely used cash last year.

The review will be led by Natalie Ceeney, former head of the Financial Ombudsman Service.

Commenting on the review’s purpose, Ceeney said the rise of contactless and digital payments had “changed the relationship” between cash and consumers.

“Many people in the UK have already made a shift to paying for most things digitally, but at the same time, there are between two to three million people across the UK who are entirely reliant on cash.

“Over the next decade and beyond, we will see significant changes driven by technology, and we need to ensure that we consider now how these will affect different segments of society, and plan so that no-one is left behind.”

Ceeney added that the review’s main obective was to identify the necessity of an “inclusive cash access service” that met the needs of all consumers, regardless of personal circumstances.

“The Access to Cash Review’s main objective is to identify what is needed by way of an effective and inclusive cash access service that meets the needs of all consumers, regardless of their personal circumstances.”

LINK will spend six months gathering information and is inviting contributions to the review at www.accesstocash.org.uk.

The network came under fire at the beginning of 2018 after confirming plans that would reduce funding for free-to-use ATMs across the UK. Following a consultation, LINK will reduce the “interchange” fee, the transaction cost covered by banks, by 5p over the next four years, starting with a 1p reduction from July 2018.

Consumer watchdog Which? criticised the plans at the time, and welcomed LINK’s new review.

Harry Rose, Which? money editor, said:“We’ve seen hundreds of ATMs closing across the country, with more under threat, which risks excluding the millions of people still reliant on cash in their daily lives. This review is much-needed and we’ll be pushing to ensure that everyone’s access to cash is properly protected.

“It seems incredulous that LINK didn’t carry out a similar process before it decided to cut funding to the ATM network in the first place. The Payments System Regulator should really be undertaking this task and conducting a wider market review to ensure people aren’t stripped of their ability to access their own money free of charge.”

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Praseeda Nair is the editorial director of Business Advice, and its sister publication for growing businesses, Real Business. She's an impassioned advocate for women in leadership, and likes to profile business owners, advisors and experts in the field of entrepreneurship and management.

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