e importance of cash – Natalie Ceeney: protecting cash is pointless if it can’t be spent Largely fueled by the digital evolution, the role of cash continues to change within society. Payment Expert spoke to Natalie Ceeney of Cash Access UK, as she described why cash simply can’t be neglected and the impact legislation needs to have on its usage. 

PaymentExpert: Firstly, can you tell us more about your organisation and what you do? 

Natalie Ceeney: I’m the Chair of Cash Access UK, which is a newly formed non-profit company funded by and owned by the 10 largest UK retail banking groups. Our role is to ensure that there is ongoing cash access for communities (including small businesses as well as consumers) who would otherwise be left behind by the march towards digital payments and digital banking. We work with LINK, a firm that identifies where there are gaps in cash provision, whether that be ATMs, face-to-face banking services, or deposit services. If the gap is an ATM, LINK fulfil the need themselves. If it’s a deposit service or banking service, then Cash Access UK deploy appropriate services in the community. Anyone can prompt LINK to conduct a review, free of charge, through a form on their website.

We were established in December 2022 and are already running seven banking hubs, with another 61 in the pipeline – a number which will have grown by the time you read this article.  By the end of 2024, we expect to be running a UK-wide network of around 200 banking hubs and SME deposit services.

PE: How crucial is it from an economical perspective that the most vulnerable are accounted for and are able to engage with transactions? 

NC: There are more than five million people in the UK who depend on cash. They are disproportionately the most vulnerable in society, not just older but those on lower incomes, those without digital access to services, and those who can’t get a bank account for any reason – which is still over one million people in the UK. There is now widespread understanding that this group needs to be able to access cash, and the government has just legislated to make this a requirement on the banks.

Different people have different motivations for protecting the needs of this group of society. The most commonly voiced motivation isn’t economic, but is simply about social inclusion and fairness. Five million people is a large group, and excluding them from being able to pay for goods and be paid feels fundamentally unfair.There is definitely a strong economic argument for support too. From a consumer perspective, particularly with the cost-of-living crisis, cash has reemerged as core to those who need to budget. The social, as well as economic consequences of people going into avoidable debt, through bank charges for example, are well documented. 

There is a strong argument from charities supporting those with disabilities, or age related limitations, that allowing people to make and receive payments safely protects independent living. It remains much safer to give someone £20 to do some local shopping than to hand over a debit card. However, these arguments are for the economic benefits of inclusion, rather than for the protection of cash per se. Actually, living in a solely cash economy can be very expensive, as it stops you being able to buy online, buy in bulk, or take advantage of online discounts. 

The key economic value from a consumer perspective is to ensure that payments, whether digital or cash, work for everyone in society, to maintain independence and avoid unnecessary debt.As digital engagement grows, the segment of society who are dependent on cash has become a minority, with cash representing just 15% of retail transactions today vs 60% a decade ago. 

The cost of supporting this segment, through ATMs, banking branches and deposit services for small businesses is therefore growing on a per-transaction basis as the costs of a UK-wide network remain despite falling usage. That’s one of the key benefits of the work we do at Cash Access UK. We are running a shared service infrastructure enabling consumers and small businesses to retain their services, but with the costs shared between the banks. Finally, local services also mean local retail and local spending, as there is ample evidence that people tend to spend cash where they withdraw it. Having local cash access and deposit services can therefore be key to keeping local economies vibrant. 

PE: Why is cash acceptance so pivotal from your perspective? 

NC: Quite simply, there is really no point protecting cash access if people dependent on cash can’t spend cash. Any debate on cash access therefore needs to consider cash acceptance as the other side of the coin.

PE: If cash acceptance is so important, should all retailers be made to accept cash? 

NC: Cash acceptance is the other side of the coin to cash access. But I have yet to meet many people who think that the answer is to require every coffee shop in the UK to accept cash. Over the course of this work I’ve spoken with thousands of retailers, alongside working with small business organisations. For most small businesses, and particularly high street shops, the requirement for them to accept cash is primarily the ability to deposit cash locally and easily.

Requiring them to shut up shop and drive to the nearest town and queue can be the trigger to go cashless. The majority of small businesses don’t want to turn away customers, so most want to accept cash so long as it’s easy and low cost to do so. That’s why Cash Access UK is targeting our services at both vulnerable consumers and small businesses, on the basis that if we can make it easy to deposit cash, then most will accept cash.

PE: Do you think the growth of the digital economy and the move away from cash has left us more vulnerable to cyber attacks? 

NC: Without any doubt, crime goes where the money is.   If money is now moving around online rather than in physical currency, it’s inevitable that cyber attacks have replaced high street muggings or bank heists as a way of conning people out of money.We are all susceptible to cyber attacks, particularly as technology is getting more sophisticated. Those of us who confidently deleted emails from Nigerian princes looking to share their millions might find a gen AI deep fake phone call harder to ignore. Those who are the most vulnerable are, unsurprisingly, the most likely to be conned. It therefore shouldn’t surprise us that a fear of fraud is a common and very rational reason for people’s preference for cash.

PE: How do you believe bank branch closures are impacting the most vulnerable and their trust for payments? 

NC: ‘Cash Access’ and ‘cash acceptance’ are often used glibly as if they mean the same thing for all people. But they don’t. Many people who equate cash access to having an ATM machine will be surprised to hear that ATMs often don’t meet the needs of the most vulnerable, particularly if they are somewhere that feels physically unsafe (outdoors, down a side street, or with poor lighting), or if the individual wants to withdraw small sums (you can get £3,78 over a counter, but not from an ATM).Most people don’t use bank branches, but those who depend on cash are largely the same population who do. 

For someone on low incomes, withdrawing less than £20 can be a common occurrence,  and being able to bank deposits the same day as you are paid can make the difference between paying a bill or going overdrawn and incurring fees. For someone who is physically vulnerable or disabled, having a ‘real person’ count the money for you in a safe and private space can allow you to bank for yourself, rather than rely on friends and relatives.  

’Safe and private’ are the two words most commonly used by the cash dependent when we ask them what they need to make cash deposits and access cash – which are best provided face to face, somewhere indoors and secure. And the same population are the least likely to have their own transport, so telling them that their branch has closed but there is another one 11 miles away might be adding two hours of bus travel onto their day, or making independent banking inaccessible.

There has been a very clear backlash from a wide segment of society to the closure of so many bank branches over recent years. MPs tell me that it’s the most regularly raised issue in their constituency mailbags. It’s for that reason, after extensive research, we’ve created and are now rolling out the concept of a Banking Hub, which provides those basic counter and banking services, targeted at this cash dependent community. So far, the feedback has been extremely positive.

PE: Do you believe that regulation needs to be adjusted to increase how cash is accepted and how important is it that small businesses are consulted on this regulation?

NC: Regulation on cash access and deposit services  is fast approaching. The new Financial Services and Markets Act was passed in June 2023, and over the coming months we expect HM Treasury and the Financial Conduct Authority to issue draft guidance for consultation on how the law will be enacted. The law covers cash access and deposit services, not cash acceptance, covers all parts of the UK, and requires banks to provide suitable services to both their retail and small business customers. But the focus on deposit services will help many businesses maintain cash acceptance. 

The key issues up for debate include what criteria should trigger the need for Banking Hub or deposit services (or ATMs) as well as which banks will be bound by the new legislation. The small business groups have been heavily engaged in this work already, and I expect an active response to future consultations. 

Where I do believe that there should be a stronger government push for action is around essential services. There is already evidence that many older people are avoiding city centre car parks as they have ‘gone cashless’ – hardly good economics when our retail centres need footfall. For utilities, I do believe that people should have the right to pay their bills in cash, as good providers allow over Post Office or PayPoint counters already. Saving a few pounds in cost by going cashless will simply exclude the most vulnerable in society.