Credit, Collections & Insolvency News
The Government has proposed legislation that will see consumers and businesses granted the legal right to withdraw and deposit cash within “a reasonable distance” of their home or premises.
Analysis suggests that cash remains a necessity for at least 8m people, and while UK Finance data shows that the number of payments made with cash dropped by 35% last year, it still accounted for 17% of all payments, making it the second-most-popular way to pay behind debit cards.
Treasury proposals state that the government proposes that these geographic requirements would be set on the basis of cash access facilities being available within maximum distances of a minimum percentage of the population. Initially, the Treasury suggests that people should not have to travel more than 1 kilometre, with this distance potentially extended over time if the use of notes and coins declines.
This consultation is the next step in legislating to protect access to cash and ensuring that the UK’s cash infrastructure is sustainable for the long term. Despite the decline in cash use over recent years, cash remains an important payment method for millions across the UK, which is why the Chancellor committed and March Budget 2020 to legislate to protect access to cash.
In line with this commitment, the Treasury undertook a Call for Evidence in 2020, which sought views on the key considerations associated with cash access. The Government also legislated in the Financial Services Act 2021 to facilitate the wide-spread adoption of cashback without a purchase. This consultation sets out proposals for further legislation. It seeks views on: establishing geographic requirements for the provision of cash withdrawal and deposit facilities, the designation of firms for meeting these requirements, and establishing further regulatory oversight of cash service provision.
Commenting on the proposal David Postings, Chief Executive of UK Finance, said “The banking and finance sector understands the importance of cash payments for many people and has already taken the initiative by publicly committing to ensuring there is access to cash for those who need it, both now and in the future.”
“The independent Community Access to Cash Pilots, which are supported by the major banks, consumer and SME groups, the Post Office, and LINK, are already working with eight communities across the UK to trial and test different ways to allow people access to cash. We will use the learnings from these pilots to develop a longer term solution and have alreadyy convened a dedicated Action Group to consider the best approach to take to sustain access to cash across the UK.”
“We welcomed the government’s swift action to allow cashback without purchase and will continue to engage with government and regulators as part of our wider work on access to cash.”