The numbers don't add up: universal provision of access to cash called into question

The UK's Treasury Committee has called for urgent action to prevent the collapse of access to cash as ATM numbers drop and bank branches disappear from the high street.

The Treasury Committee's intervention follows a report earlier this week by consumer group Which? calling for the appointment of a new regulatory body to guarantee continued provision of cash to disenfranchised communities.

New figures obtained by Which? show cashpoints disappeared at a rate of 488 per month between June 2018 and December 2018 with over 250 free-to-use machines also closing monthly - due to changes in the way the UK’s cash machine network is funded.

Which? is concerned that the double blow of cashpoint and bank closures - with more than 3,300 UK branches closing since 2015 - is leaving communities struggling to access the cash they rely on.

In evidence to the Treasury Committee, Charles Randell, chair of the Payment Systems Regulator, said that the whole system of access to cash needs to be looked at afresh.

Randall agreed that there is a need to guarantee access to free-to-use ATMs, "but with changes to the way people are using cash and contactless payments affecting the economics of the cash distribution industry, we need to have a debate this year about whether access to cash should be a universal service, rather than a commercial one."

Nicky Morgan, chair of the Committee says that the PSR's statement should set alarm bells ringing.

“It’s clear that the whole way that people access their cash via ATMs is starting to fail," she says. “Mr Randell suggested that there is a serious discussion to be had this year about whether access to such a basic financial service should be universal, or commercially driven.

“With the way that people access their cash seemingly on the precipice of collapsing, the Government can’t just bury its head in the sand. This mustn’t fall through the gaps of responsibility - the Government and regulators should get a grip of this problem before the whole arrangement collapses.”

In a separate session, Stephen Jones, of UK Finance told the Committee that measures to give account names the same importance as account numbers and sort codes when transferring funds under the Confirmation of Payee system would be unlikely to come to pass until "some time next year". 

Considered an imp0rtant provision in halting the rise of authorised push payment scams, the move would force banks to delay payments when the recipient's name does match.

While the PSR had suggested a July enforcement date for the initiative, Jones told the Committee that the system would require a complex change in bank IT and processing systems.

"This is a big change at a time of a lot of change," he told the committee.+