Retailers across the country alongside consumer group Which? are today making a joint appeal for the Government to intervene to safeguard millions of consumers and businesses who rely on cash.
Whilst cash use has been falling in recent years, according to the British Retail Consortium, cash purchases totalled £78bn in retail sales last year. It remains an important method of payment with 2.2 million people entirely dependent on cash in the UK. Furthermore, two-thirds (67%) of consumers use cash more than once a week and one-in-four (28%) people retain a preference to pay via cash.
The pandemic has led to a further drop in cash purchases as customers chose alternative channels. Yet, even as the number of cash transactions have fallen, retailers are finding it increasingly difficult to secure basic cash services – such as store collections – while the cost of these services levied by banks and other providers has risen.
With costs increasing for facilitating of cash transactions, retailers are calling on the Government to step in to maintain competitive commercial cash supply services across the UK and protect cash-dependent consumers. It is also important that shops are compensated fairly for providing customers with financial services through store ATMs and cashback. Retailers including the Post Office have been increasingly called upon to stand in for banks in recent years with 10,000 fewer ATMs in operation than in 2017 and 3000 fewer branches than 2015. Forcing retailers to hold large amounts of cash also increases the risk of crime, raising [insurance] costs for retailers and putting pressure on consumer prices.
Not being able to access and spend cash has alarming consequences for consumers, especially those in the UK’s more remote communities, while the move towards pay-to-use ATMs is major concern in less affluent areas where people are penalised and disincentivised to withdraw cash, with adverse knock-on effects for local economies.
The joint call for action comes from the British Retail Consortium (BRC), Association of Convenience Stores (ACS), Federation of Small Businesses (FSB), British Independent Retailers Association (Bira) and Which? on the day that the Government’s call for evidence on access to cash closes.
Andrew Cregan, payments policy advisor at the British Retail Consortium, says: “Cash is a key part of the payment mix, accounting for 37% of all retail transactions last year. Whilst the pandemic has resulted in an increase in card payments, ongoing economic uncertainty will place further pressures on customers who rely on the availability of cash.
“With cash services increasingly difficult to obtain and the cost of these services rising, the BRC is calling for fair compensation for retailers providing financial services to their customers which will in turn protect access to cash for many vulnerable people.”