Britain’s major retail banks have committed to protecting cash as a payment option, however the vastly differing timeframes for fulfilling these commitments ‘underline the critical need for government action’, according to activists.
Annabel Hoult, Chief Executive of Which?— a UK organisation that promotes informed consumer choice—wrote an open letter to banks that called on them to publicly commit to ensuring cash is available to all who choose it over other payment methods.
Urgent steps must be taken to ensure that irreversible damage is not caused to the cash system until longer term protections are agreed.
This follows reports that more than a third of consumers have been unable to pay for goods and services with cash during the COVID-19 crisis. A Which? report found people were most likely to be refused their payment option of choice while shopping for groceries, followed by going to pubs or restaurants, and buying cleaning products. This was especially concerning in the case of a diabetic man in urgent need of food to raise his blood sugar levels who was unable to pay cash at a service station KFC. In another case, a woman with a broken angle was refused a bus ride to visit her GP when she tried to pay using a banknote.
The 2020 Budget announced legislation to preserve access to cash, however it did not give a timeline for introducing it.
We have repeatedly warned about the consequences that coronavirus will have on what was already a fragile cash system, but nowhere near enough action has been taken by the Government or the regulator to understand the scale of the issue.
The response to Annabel Hoult’s call for action was positive from all banks, acknowledging the importance of safeguarding the cash network to preserve payment choice. There was a consensus on the significant role that would be played by Link—Britain’s largest cash machine network—and the Post Office in the short to medium term.
Ultimately, however—largely due to the lack of clarity in the Government’s planned cash legislation—the banks stopped short of explicitly committing to a particular course of action.
Almost two million Brits use cash for nearly every transaction, and 22 million depend on it as an essential back-up for card payments. Seven million report they would struggle to function without it. All this adds up to a clear need to ensure people are given a choice about how they pay, and have access to cash when they need it.
While the campaign to preserve payment choice continues, there are glimmers of hope, such as the launch of a new ‘Cash in Shop’ service that allows people to collect cash from stores when shopping in person, or have it delivered with their shopping.
Already successfully trialled in Switzerland, the service differs from existing cashback provision as no purchase is necessary. Users simply pre-order money from participating shops that can then be collected or delivered alongside regular shopping.
A huge portion of society relies on cash, so we need to keep innovating to ensure we have the infrastructure to support demand. Cash in Shop… will improve the availability of cash in the areas that need it most.