Millions of people in the UK, including the elderly, those without internet access, and some of the poorest in society, risk being left behind as cash use declines and ATMs vanish. The Covid-19 pandemic has accelerated the closure of bank branches and cash machines, particularly in rural and isolated communities.
One solution being trialled is 'purchase-free cashback' at local convenience stores. In Denny, Stirlingshire, shopkeeper Imran Hamid allows residents to withdraw cash from his till using a PayPoint machine, without requiring a purchase. The service, supported by Link, the UK's cash machine network, is being used frequently, with an average withdrawal of £26.80—about a third of a typical ATM withdrawal.
Mr Hamid, whose family has run the store for 50 years, says the scheme helps elderly residents and those on benefits who need access to small amounts. 'If someone on benefits has only got £3.50 left in their bank account and they want that £3.50, I can give them that £3.50 and it is not going to cost them anything,' he said. Unlike ATMs, users can withdraw any amount from a penny to £100.
The trial is part of a wider set of tests in eight cash-stricken communities across the UK, including a financial hub in a Methodist church and drop-and-go deposit points for small firms. Link's chief commercial officer, Adrian Roberts, noted that as few as one in 30 transactions could be made in cash in a few years' time, and many ATMs in quieter areas will not be commercially viable.
Cash withdrawals from ATMs fell dramatically during the pandemic—by up to 81% in central London and around 70% in Edinburgh and Glasgow. Link's survey suggests three-quarters of people will continue their reduced cash use. The government has signalled support for expanding the convenience store cashback scheme, which would require legislation. A consultation on access to cash ends this week, following a critical report by the National Audit Office on the fragmented response to disappearing cash access.
