News & Views - Savantor

Protection of the vulnerable in a digital society

Thursday, 16 May 2019

The consumer organisation Which? published figures this month highlighting that whilst the number of free-to-use ATMs has been steadily declining, in March the numbers dropped sharply with 1,250 ATM’s switching to charging fees in that one month alone.

Figures obtained by Which? from Link show that at the beginning of 2019, there were around 52,000 free-to-use ATMs in the UK. However, around 1,700 were converted to pay-to-use in the first three months of the year, with at least 1,250 switching over in the month of March. This represents a reduction of about 2.5% in a single month and shows a steep acceleration in the ongoing decline of the free cashpoint network.

Two of Britain’s two largest cashpoint operators, Cardtronics and NoteMachine, told Which? that things are likely to get even worse as a further 5,000 free-to-use machines have been identified that could be switched to fee-charging in the coming months. Taking into account other expected losses, Which? warns that this would see there being around 15% fewer free-to-use cashpoints by the end of the year.

The significance of this decrease is the impact this will have on those who can afford it least, with society’s most vulnerable being worst hit by reduced access to cash. In spite of the rise in popularity of digital payments, according to Which? around 2.2 million people are almost entirely reliant on cash in their daily lives.

Bank branch closures, changes to the way the industry is funded and a reduction in the demand for cash have all contributed to the decline in free-to-use ATMs, which Link has previously said is consistent with falling demand for cash.

However, as the loss of cash machines is a significant cause of reduced ATM withdrawals, it can be seen to be rather a self-fulfilling prophecy. 

Which? is petitioning the government to intervene and appoint a regulator who can ensure that both cashpoint funding and wider cash access are planned and managed with consumer interest as a priority.

At the same time, the Treasury Committee has published a report saying that free-to-use ATMs and bank branches should be legally preserved with a new watchdog set up to prevent closures denying people access to cash. It is proposing a guarantee to ensure a right to access cash, potentially enforced by a legal duty of care on banks.

The Committee warns that if no action is taken, the UK risks becoming a cashless society which would have stark consequences on some of its most vulnerable members.

Whilst a cashless society may be seen by many as an ideal for which to strive, it should not be to the detriment of its weakest members. Such a change needs to be carefully managed to ensure that it does not lead to the financial exclusion of the vulnerable. 

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