ATMS

OPINION: JOHN LEE, HEAD OF PUBLIC AFFAIRS, SGF

ACCESS TO CASH UNDER MAJOR THREAT

WITH AROUND 5,400 ATMS STILL SHUT BECAUSE OF COVID-19,ACCESS TO CASH IS BECOMING A HUGELY IMPORTANT ISSUEFOR MANY COMMUNITIES, SAYS SGF’S JOHN LEE.

According to data supplied by The Sunday Times, an astonishing 7,200 cash machines were shut down in April and May alone this year. Of those, some 5,400 are still shut, raising fears that many will never reopen.

This has resulted in a severe cash shortage in the UK, as many ATMs ran out of money or were simply switched off. According to The Sunday Times, people in dozens of communities were forced to travel over three miles to access the nearest functioning cash machine.

Some of the ATMs were closed because operators were unable to get access to the safe behind the machines located on the exterior walls of business premises that had been forced to shut. This clearly exacerbated the problem, along with a mass switch to contactless and credit/debit payments.

Cash withdrawals have fallen by 60% but 23% of people are still using the same or more cash and around £1bn is still being taken out of ATMS each week.

This is a hugely important issue and SGF has been working directly with LINK on this. In its view, access to cash remains vital to millions of consumers but the decline in volumes is putting many ATMs under pressure. Convenience stores are an especially important location for ATMs and LINK is working hard to maintain that network and to reopen any ATM that has closed because of the Covid crisis.

It is true that, during the pandemic, cash withdrawals have fallen by 60%, but 23% of people are still using the same or more cash and around £1bn is still being taken out of ATMs each week. Before the crisis, 76% of transactions in c-stores were still being processed in cash. Indeed cash is an integral part not only of the business model in convenience – customers on a budget will almost always prefer to use cash and an impulse purchase will probably be paid for in cash – but also of the wider services a convenience store offers.

Some time ago, working with payment service providers, we uncovered the fact that at least £175m in rent and council tax payments are made each year in convenience stores in Scotland alone. Much of this is paid in cash. This is quite a remarkable figure and is undoubtedly invaluable not only in ensuring people can pay these bills but also in ensuring money flows towards local authorities and housing associations.

The loss of free ATMs, and the closure of bank and building society branches, will continue to hurt the most rural and poorest communities in the UK. The most deprived communities (the main victims of the war on cash) saw the smallest declines in cash withdrawals, with the biggest drops occurring in city centres like Glasgow, where withdrawals fell by 80%. Quite simply, digital payments do not work for everyone and we must maintain a cash infrastructure to stop millions from being left behind. As Hugh Grant once sang: “Don’t write cash off just yet!”