Consumer group calls for regulator to address ‘serious concerns’ on impact of digital payments

Written by Jenni Davidson and Sam Trendall on 13 February 2019 in News

MP lends support for Which? Campaign to protect access to cash and highlight the dangers of the move towards a cashless society

Which? is calling on the UK government to set up a regulator to ensure people continue to have access to cash in the wake of bank branch closures.

The consumer affairs body – whose calls have been backed by politicians – said a combination of recent bank branch and cash machine closures risked leaving people struggling to pay for goods and services.

Although 250 cashpoints close across the UK every month, data on cash machine withdrawals from Link, shows the move away from cash is a fairly slow one – particularly in Scotland, where 2017/18 withdrawals declined just 3.3%. Withdrawals in London and south-east England fell by 8.5% and 7.7%, respectively.

While electronic payments are on the rise, Which? has found 73% of the UK population still use cash frequently.

Electronic payment methods are also vulnerable to technological problems, with recent analysis finding that leading banks are suffering at least one major security or IT glitch per week, including the prolonged issues at TSB, which caused chaos for millions of customers.

But without urgent regulatory action, Which? is warning that the UK risks drifting into a cashless society that could shut people out of being able to pay for local goods and services and leave people without a non-digital alternative payment method.

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Jenni Allen, managing director of Which? Money, said the branch and cashpoint closures in Scotland, in particular, raised “serious concerns”.

She added: “Cash is a vital backup as fallible digital payments grow in popularity, so the UK government must appoint a regulator to oversee these changes and ensure no-one is excluded and left struggling to go about their daily lives.”

Labour MP Ged Killen, who has launched a private member's bill in the House of Commons to ban ATM charges, backed the call for a statutory duty to protect access to cash.

He said: “The findings by Which? highlight the widespread closure of ATMs and bank branches which has cut off relied-on services for huge swathes of consumers, in some cases leaving those with higher access needs such as the elderly or vulnerable with nowhere to turn. The government simply has not done enough to protect access to cash.  Recent IT failures have shown that cash is a vital fall back when electronic systems fail.”

Killen added: “Without protecting access to cash, we could inadvertently create an economy which has a structural weakness to hacking and IT failures, meaning day to day life could be severely disrupted by accident or intentional cyberattacks. We must therefore provide protections for cash in a mixed market of payment methods and seriously look at changing the law to create a statutory duty to protect access to cash.”


About the author

Jenni Davidson is a journalist at PublicTechnology sister publication Holyrood, where a version of this story first appeared. She tweets as @HolyroodJenni.

Sam Trendall is editor of PublicTechnology.

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