Community access to cash pilots scheme launches

A pilot scheme testing solutions to local cash access being trialled in several locations across the UK. Funded by the banking and finance industry, the Community Access to Cash Pilot is testing measures that enable consumers and small businesses to deposit or exchange cash and receive face-to-face support from branch staff.

Two ‘BankHubs’ have opened as part of the pilot. The new centres in Rochford and Cambuslang will provide local customers with basic banking and cash services, as well as dedicated rooms where they can see community bankers from their own bank.

The trial stage of the Pilots will run until the end of September 2021, when the results of the pilot will be used to inform regulators and industry alike so that cash can remain a viable mode of payment for consumers across the UK, and so that small businesses are able to continue to accept and bank cash.

The scheme has been created as access to money has become difficult in some rural areas due to bank branch closures and the declining number of cash machines.

Nine locations across the UK will have tailored services introduced as part of the scheme. The bank hubs will also provide access to face-to-face community banking services, provided by those banks which have the most customers in each area.

Other ideas being piloted across the other six communities involved include cashback from local shops, automated deposit taking machines for small business to deposit their takings, digital services to make it easier for people to get cash and manage small change, and new ATMs.

Around eight million adults have said they would struggle day to day without cash access, and 1.4 million people do not have a bank account and rely on cash to survive. 55% of small and medium sized enterprises (SMEs) do not accept cards and rely entirely on cash payments, meaning they need somewhere convenient and secure to deposit their takings.

Yet access to cash is rapidly declining, with widespread bank branches closures across the country. The CACP scheme has been established to trial and test scalable solutions to help keep cash sustainable across the UK, and support those that depend on cash to live.

The CACP launch marks a huge step forward in providing a solution to bank branch closures. Post Office branches already provide critical cash deposit and withdrawal services for millions of personal and business customers every week from 11,500 branches across the UK, with 99% of the population living within three miles of a Post Office.

The financial services industry, wider market participants and the Government have a joint responsibility to ensure that everyone in the UK can continue to participate fully in the financial system irrespective of their circumstances. The Banking Framework is an agreement between Post Office and 30 UK banks, building societies and credit unions, that ensures millions of customers have national, free access to cash and vital banking services over the counter from their local Post Office.

On average, over £2 billion of cash is withdrawn and deposited per month at Post Office branches. Annual volumes of cash withdrawals via Post Office counters have grown by 46%, to £7.8 billion since the start of the Banking Framework in 2017, and cash deposits have increased by 110% to £22.1 billion in the same period.

While the CACP scheme offers much promise, there must still be a continued obligation on retail banks to provide access to cash withdrawal services free at the point of service for both consumers and businesses across the country.

Recent research suggests that five million people remain dependent on using cash.

Nick Read, CEO at Post Office, said “We are proud to be at the heart of the CACP programme and see the BankHubs as an exciting expansion of our role in safeguarding a secure and sustainable future for cash, as well as our partnership with the banks. Access to vital banking and cash services are imperative in ensuring financial inclusion, and the positive reaction to the pilots so far is testament to just how pressing it is that we support communities and consumers that would struggle without cash. The Hubs can make a real difference as part of the solution to meeting peoples’ cash needs in future.”

Martin Kearsley, Banking Director at Post Office, said “In many communities, Post Office is the last counter in town for cash services, but for many people who still need a place to meet their bank, our new BankHubs are a lifeline. The Post Office network has long formed the bedrock of cash access in the UK and we’re fully committed to continuing and expanding that role. We see it as essential that any community struggling amid bank branch closures, and those whose livelihoods depend on cash,be provided with an appropriate solution, and hope that in partnership with the banks, the Hubs will prove to be a great success.”

Natalie Ceeney, who is behind the Access to Cash Review said more people were moving towards contactless payments, even for items that they would have used cash for 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 don’t have access to wider banking services that many of us take for granted.”

“These pilots are important, but it is more important action is taken to sustain cash for the longer term. As communities across the UK have already seen, once infrastructure is gone, it is very difficult to replace.”

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.”