As the role of cash continues to evolve within the UK payment ecosystem, the FCA has been strengthened with new powers to bolster the availability of cash withdrawal and deposit facilities in the country.
New legislation brought in by the government will see the FCA empowered to address cash issues at both a national and local level – a decision that reflects the growing need for increased cash facilities in the UK.
Economic Secretary, John Glen, who will be visiting Scotland on Thursday, said: “Millions of people across the UK still rely on cash, particularly those in vulnerable groups, and today we are delivering on our promise to ensure that access to cash is protected in communities across the country.
“I want to make sure that people are still able to use cash as part of their daily lives, and it’s crucial to ensure that no person nor community across the UK is left behind as we embrace a more digital world.”
Furthermore, it comes as cash remains the second most frequently used method of payment in the UK – with almost 5.4 million adults still relying on it to a very great or great extent in their daily lives.
Dean Wallace, Director of Consumer Payments Modernisation at ACI Worldwide, commented on the move to empower the FCA: “Cash is not going away. And why should it? There are people in society who want it, and need it. This move protects that need, and provides necessary choice.
“With branch closures, rural Post Offices struggling and ATM IADs not as strong as they once were thanks to reduced demand for cash, it’s important for society these sorts of moves are made.
“But we do appear to be moving into a cashless future. The FCA’s move will only delay that end point, and such a delay opens up the opportunity to educate. At some point we will hit the tipping point that could cause unnecessary cost to the market to support the remaining few cash die-hards. One day, we’re going to have to bite the bullet and move away from cash, similar to what we have seen in Scandinavia. Today’s announcement just underlines we aren’t quite there yet.
“It’s undeniable that physical cash is falling out of favour – free payment options like mobile wallets, contactless cards and real-time payments are now the norm. The mindsets of consumers and businesses have changed. What’s needed is further support from the Government and banks to educate those reluctant to move away from cash, and explain why switching to digital payments can benefit them.”
It also comes after a speech from the Chancellor, who emphasised that the UK must remain at the forefront of innovation and technology, and the government recognises the need to embrace the transition to a more digital world and realise the opportunities this brings individuals and businesses.
But as we transition to a digital payments system, he also acknowledged that it remains critical to acknowledge that cash access remains vital to millions of people in communities across the UK, particularly those in vulnerable groups, and no one should be left behind.
The government passed legislation to enable the widespread adoption of cashback without a purchase as part of the Financial Services Act 2021, which was possible as a result of the UK’s departure from the European Union.