Banks warned against shutting ATM as watchdog vows to protect cash
The Financial Conduct Authority (FCA) has said access to cash remains a “critical priority” as the number of closing cash machines across the UK continues to rise.
The UK regulator said it would step in where necessary if banks and Post Offices close ATMs in areas where there are no other alternatives.
“Although most people can access cash and essential banking services, government, industry and regulators need to act to make sure it stays that way,” said Sheldon Mills, executive director for consumers and competition at the FCA.
Speaking at the second Which? cash summit on Thursday, he said: “We know that many are still reliant on cash and they should have the choice to continue to do so.”
There was a 40% fall in cash machine withdrawals in 2020 as the COVID-19 pandemic caused more people to use contactless card payments and shift to online shopping.
But one in seven Brits - 750,000 people - reported struggling to cope with the temporary closures of cash points and branches during the pandemic. Vulnerable and elderly customers were the worst affected, as were small businesses. 5 million adults still use cash for the majority of their purchases.
“The transition from face to face services to online or telephone will take time and sometimes it’s only a face to face interaction that can help access,” Mills added.
“In addition to being able to access cash, people continue to seek in-person assistance in a branch, whether it’s help with bill payments, checking transactions or making larger withdrawals.”
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Access to cash across the UK is generally good, the FCA said, with 95% of Brits living within 650 metres of cash machines in urban areas and within 3.5km of one in rural areas. Only around 150,000 people live more than around 5km away from their nearest access point.
However, cash points have been closing in huge numbers in recent years as usage of cash declines. Previous research by Which? showed that when a free-to-use ATM is lost in a rural area, residents have to travel around three times as far as those in urban areas.
UK Finance, which represents banks and building societies, said on Thursday it was committed to continuing to preserve access to cash for consumers and businesses. The industry urged government intervention to support continued access to cash.
“Government must take action now, to bring forward legislation to protect the future of cash, monitor its effective support through regulatory oversight, and prevent millions from being cut off," said Martin Kearsley, director of banking at Post Office said.
Data from the FCA showed ATM withdrawals were starting to rise as lockdown restrictions lift across the country.
Watch: Should I pay off debt or save money during the coronavirus pandemic?
