Cash machine

Source: GettyImages-886933514 (2)

Free access to cash for consumers is to be protected following the introduction of new government measures.

A new framework set out by the Treasury has set out the minimum expectations on banks to protect services for people and businesses wanting to withdraw or deposit cash.

Its aim is to maintain “reasonable access” to deposit and withdrawal services for these accounts. This includes access to cash deposit and cash withdrawal services within a maximum of one mile of where they live in urban areas, and access to cash deposit and cash withdrawal services within a maximum of three miles of where they live in rural areas.

The government said it expects that the Financial Conduct Authority (FCA) will continue to monitor the coverage of access to cash, which will be further supported by new powers for the FCA to collect information from providers of cash access services and other relevant entities. The FCA has been granted new powers by the government to protect this access and if banks and building societies are not meeting the standards outlined, they can be fined.

In a statement, the government said it “recognises that digital payments may not yet be a suitable option for many people who still rely on notes and coins, for example to manage their finances, do their shopping, or to help out friends and relatives”.

The statement continued: “The government also recognises that businesses need access to cash deposit services in order to keep accepting cash and, therefore, support people’s ability to continue to transact using cash. Given the overall reduction in cash use experienced in the UK, in the absence of government intervention the provision of services to access cash may decline in a disorderly way which is detrimental to users. Therefore, the government has legislated to protect access to cash services through the Financial Services and Markets Act 2023 to ensure that cash remains available for those who need it.”

The Association of Convenience Stores (ACS) welcomed the new measures.

Chief executive James Lowman said: “Cash is an extremely important payment method for millions of consumers and businesses across the UK, but the rapid closure of bank branches and ATMs have meant that the majority of people now rely on their local convenience store to get access to their money.

“We welcome the new measures which have been introduced to protect cash and are continuing to call on Ministers to review the viability of interchange fees so that convenience retailers can continue to offer free access to cash in communities instead of being switched to a pay-to-use model.”

ACS recently launched a tool which reveals the change in ATM provision in every constituency across the UK.

The trade body’s 2022 Local Shop Report revealed that 44% of UK convenience stores provide a free to use ATM, while 18% provide a pay to use ATM.