Financial Conduct Authority to be given powers to bolster access to cash
The Financial Conduct Authority (FCA) will be given new powers over banks and building societies to ensure the continued availability of withdrawal and deposit facilities for cash in local communities across the UK.
A report from Merchant Machine last year found that if the current trend of declining cash usage in the UK continues, the country could become entirely cashless in just five years.
But with more than two million Brits still thought to be almost entirely reliant on cash in their daily lives, particularly the elderly, vulnerable and those in rural communities, the government has been forced to take action to maintain its availability.
New measures will be legislated for in the upcoming Financial Services and Markets Bill that will give the FCA powers to allow it to address cash access issues at both a national and local level.
The government has said it will soon set out its expectations for a reasonable distance for people to travel when depositing and withdrawing cash.
Economic secretary John Glen, 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.”
The government passed legislation to enable the widespread adoption of cashback without a purchase as part of the Financial Services Act 2021. It also plans to introduce legislation that will give the Bank of England powers to ensure the UK’s cash infrastructure, which includes the network of cash centres integral to the sorting, storing and distribution of notes and coin, remains resilient.
Currently, around 96 per cent of the UK population are within two kilometres of a free-to-use cash access point, which includes ATMs, bank branches and Post Office branches.
The government’s plans for legislation will allow HM Treasury to specify which banks and building societies the FCA’s powers will apply to for the purpose of ensuring continued access to cash across the UK.
Ten years ago, cash was the most frequently used means of payment in the UK, representing around 20 billion transactions per year in 2010. According to UK Finance, in 2020 cash remained the second most frequently used payment method and was used in around 6 billion payments.
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