New schemes testing out ways to boost access to cash within communities, which could eventually be rolled out more widely across the UK, have gone live.
A “new model for high street banking” is among the initiatives being trialled, involving a collaboration between the Post Office and high street banks to help bring back local banking services.
ATM and bank branch closures, as well as the impact of the coronavirus pandemic, have sparked concerns about the future of cash, although the UK Government is planning to legislate to protect it.
The locations involved in the Community Access to Cash Pilots (CACP) schemes are, within England, Botton Village (North Yorkshire), Burslem (Staffordshire), Lulworth Camp (Dorset), and Rochford (Essex); within Northern Ireland, Millisle (County Down); within Scotland, Cambuslang (South Lanarkshire), and Denny (Falkirk); and in Wales, Hay-on-Wye (Breconshire).
Each community is trialling different initiatives.
In two of these locations, Cambuslang and Rochford, new Post Office “bank hubs” have been set up, with dedicated rooms where customers can see staff from their own bank.
The hubs will offer access to basic banking and cash withdrawals and deposits through a counter operated by the Post Office.
They will also provide access to face-to-face banking services, provided by those banks which have the most customers in each area.
As well as bank hubs, other initiatives being trialled include widespread cashback from local stores, restaurants and pubs, new free-to-use ATMs and digital education services.
Coronavirus lockdown restrictions have led to delays on certain elements of the pilots going live and as many stores have been closed, those behind the scheme said.
Recent research from the Financial Conduct Authority (FCA) found that, during the pandemic, 15% of UK adults have struggled to cope without access to bank branches and ATMs, while 16% suffered as more businesses stopped or encouraged customers to use contactless or digital payments.
FCA research suggests that five million people remain dependent on cash.
The pilots are trialling solutions which could be rolled out more widely across the UK. They will run until October 2021 and then will report back their findings.
The CACP scheme is chaired by Natalie Ceeney, who led the Access to Cash Review.
She said: “Many more people are shopping online and using digital or contactless payments now, even for items that they would have paid for with cash before the pandemic.
“However, cash remains critically important, not only as a back-up when payment systems go down, but for millions of people who can’t use digital payments, don’t have reliable broadband or mobile coverage, or simply cannot afford or don’t have access to wider banking services that many of us take for granted.
“I’m delighted that the pilots are up and running, and am keen to see what local communities think of the new services.”
She added: “I look forward to seeing the results from the pilots, but we urgently need the Government to publish its promised next steps to protect access to cash, so that, if these pilots are successful, they can be rolled out rather than closed.”
Nick Read, chief executive of the Post Office, said: “Bank hubs are an exciting expansion of our role in safeguarding a sustainable future for cash, as well as providing wider financial services in partnership with the banks.”
Barclays UK chief executive Matt Hammerstein said: “We look forward to seeing the outcome of these pilots to help us continue to provide sustainable access to banking and cash to all that need it.”
Gareth Shaw, Which? head of money, said: “These initiatives could have a really positive impact on communities that have seen sharp cuts to their cash machine and bank branch networks in recent years, which have forced some cash-dependent consumers to travel unreasonable distances or face hefty charges to withdraw their own money.
“However, in order for cash to remain a viable option for people across the UK, the Government must take action. It needs to urgently set out when it will introduce the legislation it promised last year to protect access to cash, and put a wider strategy in place that ensures people who depend on cash are not cut off from the money they need to pay for essentials.”
Federation of Small Businesses (FSB) national vice chair Martin McTague said: “We’ve always said that banking hubs, operated in close collaboration with the Post Office, will be an important part of the access to cash mix in future, and it’s good to see wider innovations trialled alongside them.
“That said, where cashback without purchase is concerned, we have to avoid a situation where small businesses are expected to effectively operate as an ATM without any cash incentive to cover the additional admin and security that doing so entails.”