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March 05th 2019

Is The UK Government Doing Enough To Protect Access To Cash?

Which? is calling for UK government action to appoint a regulator to protect access to cash in communities around the country. CMSPI echoes these calls for regulation, as cash continues to be an important part of the payments puzzle for both consumers and merchants, and will be for the foreseeable future.

Banking Evolution

The methods that consumers use to access money and pay for goods and services are fundamentally changing.

UK card spending is still increasing at a rate of around 10% annually, driven by the ever-growing popularity of contactless. In the future, open banking promises to transform the way people pay. Of course, all this is leading to the further decline of cash.

In response to these changes, bank branches are closing at a rapid rate. Which? reported in June 2018 that 2,900 branches have closed in the UK in just three years. However, this is not just a UK phenomenon – the USA has seen 9,000 branch closures since 2009 while Europe saw a cut of over 6,000 branches in 2017 alone.

Meanwhile, after years of stability, ATM numbers are dwindling. LINK reported that ATMs are now closing at a rate of 300 per month, an acceleration of six-fold in recent years . This is set to be accelerated by LINK’s ATM interchange fee decreases, which will render more ATMs unprofitable for operators.

Is The UK Government Doing Enough To Protect Access To Cash?

Cash is vital for a large subset of consumers globally and is also the main competitor to card payments at the point of sale.

Without it, vulnerable and unbanked consumers are left behind, and merchants are left to the mercy of the card schemes and their fee increases: governments must recognise this and protect access to cash in their economies.

Jenna Birch

Payments Education Manager

Impact on Merchant and Small Businesses

Data from CMSPI and the British Retail Consortium (BRC) suggests that cash remains the lowest cost payment method for UK merchants. However, this cost is rising over time and further limiting access to cash will exacerbate this problem. While it remains a cost-effective alternative to card payments, cash should be promoted, rather than hung out to dry.

Despite claims that rural ATMs would be protected from interchange reductions, a large number of such closures have been seen . Indeed, rural populations and small businesses often don’t have access to electronic transactions (which are potentially costly) so ATM closures are hitting a large, vulnerable part of UK society; reports in late 2017 suggested that there are 1.6 million unbanked working adults in the UK .


In February 2019, Lloyds and Visa announced a scheme to offer merchants a fee for processing cashback transactions. This may seem like a tempting source of income for merchants, but from what we’ve seen elsewhere, cashback services have been used as a tool to undermine the ATM industry. In the US, the global networks used ‘free’ cashback services as a hook, but when demand rises, retailers were forced to pay fees.