Eight locations across the UK have been chosen to take part in an access to cash trial after contactless payments slashed ATM use by 60 per cent amid the coronavirus pandemic.
The Community Access to Cash pilot initiative will work in partnership with banks to uncover solutions to keeping cash viable for people and businesses in Britain, such as installing new ATMs and shared bank branches in selected communities.
There are fears vulnerable and elderly people could be locked out of the economy by a shift to card-only payments, as many of them rely heavily on cash to purchase items.
Towns selected for the CACP initiative largely have ageing populations, including Rochford in Essex, Ampthill in Bedfordshire and Denny in Scotland where 16 per cent of the population is over 65.
Those in Rochford are heavily reliant on cash, with residents of the Scottish town having recently seen a significant reduction in access to paper money.
Eight locations across the UK (pictured) have been chosen to take part in an access to cash trial after contactless payments slashed ATM use
Natalie Ceeney, who is leading the pilot initiative, said it is unclear whether or not cash use will ‘bounce back’ as more businesses adopt contactless only payments during the pandemic
Cash use has plummeted during the coronavirus outbreak, with many shops encouraging people to pay by card in an effort to prevent the spread of the virus.
A survey by Which? found that at the start of lockdown when only essential shops were open, around 10 per cent of those surveyed could not buy goods because they could only use cash.
Natalie Ceeney, who is leading the pilot initiative, told Radio 4 today that it is unclear whether or not cash use will ‘bounce back’ as more businesses adopt contactless only payments during the pandemic.
‘ATM use unsurprisingly went down dramatically during lockdown, it went down by about 60 per cent across much of the UK,’ she said. ‘We know that a lot of shops have started preferring cashless transactions.
‘We don’t know how it’s going to bounce back, we strongly suspect it won’t all come back, so there are going to be shops who now prefer contactless transactions and there are going to be individuals who having done all their shopping online actually see this as a preference.
‘Without a doubt, Covid will have accelerated the decline of cash.’
The CACP initiative will involve a focus on ‘digital inclusion,’ with better broadband connections and improved digital skills considered ways to help people to access money.
Other proposals include installing new ATMs, having a place for retailers to deposit cash locally, or sharing bank branch facilities.
Ampthill (pictured), in Bedfordshire, is among the eight locations selected for the Community Access to Cash pilot initiative
Hay-on-Wye, in Wales, has many independent retailers and visitors, making businesses’ ability to access and deposit cash vital
But solutions could vary depending on the community, and more locations are set to be confirmed in the coming weeks.
According to UK Finance, 7.4 million people rarely or never used cash in 2019 – but 2.1 million used cash regularly.
Ms Ceeney said: ‘Over the past decade we’ve seen a massive shift from cash to digital payments, and Covid-19 has accelerated that trend further.
‘But we know that digital payments don’t yet work for everyone, and for many individuals and communities, cash remains essential.
‘But the world is changing – we can’t just “magic” back our old bank branch and ATM infrastructure. Instead, we need to use innovation to develop new solutions as well as harness tried and tested approaches to meet people’s needs.’
John Glen, Economic Secretary to the Treasury and City Minister, said: ‘I look forward to seeing the progress made by the pilots, as the Government develops legislation to protect access to cash, and would like to thank Natalie Ceeney CBE for her work on this important issue.’
The Burslem, Staffordshire (pictured) community is keen to explore solutions for local retailers to deposit and withdraw cash
Cambuslang in Scotland was left ‘unbanked’ following bank branch closures in quick succession.
Martin Kearsley, banking director at the Post Office, added: ‘This initiative will help bring real focus onto robust and sustainable solutions for many people living in smaller towns and rural communities who rely on easy access to cash.
‘With 11,500 branches across the UK, including some in the trial communities, Post Offices help avoid cash deserts by providing a solution to people’s cash and banking deposit needs.’
Federation of Small Businesses (FSB) policy and advocacy chairman Martin McTague, who sits on the CACP Board, said: ‘One in four small high street firms say cash is the most popular payment method among customers.
‘That said, cash use was in decline before coronavirus hit, and the pandemic has accelerated that decline.’
Gareth Shaw, head of money at Which?, said: ‘With the existing cash system being pushed closer to the edge of collapse by the coronavirus outbreak, it’s clear that new solutions are desperately needed to secure people’s access and ability to pay with cash, which millions of people still rely on as their main form of payment.’
John Howells, chief executive of cash machine network Link said: ‘Our analysis of ATM withdrawals during the lockdown shows significant differences depending on where you live and that cash is even more important in deprived areas.
‘The UK isn’t ready to go cashless and Link is working hard to support communities maintain maintain cash access.’
The eight British locations taking part in the access to cash trial to keep cash viable amid coronavirus
Here is an overview of the selected pilot schemes, provided by the Community Access to Cash Pilot initiative:
Ampthill is a market town situated in an area of Bedfordshire which is targeted for extensive new home building.
Businesses and the significant number of older residents need options for depositing and accessing cash.
Botton Village: Camphill Village Trust (pictured) provides supported living and day support opportunities to people with learning and other disabilities
Botton Village, North Yorkshire
Botton Village: Camphill Village Trust provides supported living and day support opportunities to people with learning and other disabilities.
Camphill Village Trust is keen to empower people to become more financially independent.
The Burslem community is keen to explore solutions for local retailers to deposit and withdraw cash, have access to cash for the night-time economy and to support consumers with budgeting and digital options.
Cambuslang was left ‘unbanked’ following bank branch closures in quick succession.
The community is keen to support financially vulnerable customers in accessing cash, and small businesses.
Denny is located between Edinburgh and Glasgow, with a population of around 8,000, and with 16 per cent of the population over 65 years old
Denny is located between Edinburgh and Glasgow, with a population of around 8,000, and with 16 per cent of the population over 65 years old.
It has seen a reduction in access to cash facilities.
Hay has many independent retailers and visitors, making businesses’ ability to access and deposit cash vital.
Its annual book festival raises additional challenges, with large numbers of people needing to access a limited cash infrastructure for a short period.
Lulworth Camp is a Ministry of Defence army barracks with about 1,500 families and service personnel permanently on camp.
The closest village is West Lulworth which has a population of around 700 people, which is also a tourist spot as it is situated on the Jurassic coast.
Rochford has an ageing population which is heavily reliant on cash.