UK government, watchdog pledge action to protect cash

The British government has pledged to protect access to cash for vulnerable people. But this will intervene if cash machines face removal in some areas after a 40% cut in withdrawals last year as a result of the pandemic. The financial regulator quoted this statement.

John Glen, the financial services minister told a webcast event by consumer group that the government would launch a public consultation on legislation this summer to protect access to cash within a reasonable distance. Glen said that the government believes the Financial Conduct Authority (FCA) would be best placed to play a leading role in holding firms to account on access to cash so that the needs of consumers and businesses are met.

If banks and other providers close cash machines in areas where there are not even alternatives like the Post Office, the FCA said that they would intervene. They also said that even though in this pandemic situation many people are using contactless card payments and shop online, there are still five million adults who are using cash for most of their purchases. And now as the restrictions are withdrawn, the cash withdrawals had begun to rise.

Sheldon Mills, executive director at the FCA said in the event that those people who were relying on cash were vulnerable due to disability or old age and needed protection. Mills added that while legislation is essential to protect access to cash in the face of declining demand, they want individual firms and the wider industry to play a role now.

UK Finance, which represents banks and building societies said that it has made five commitments to continue to preserve access to cash for consumers and businesses over the long term. The banks are currently rolling out commitments such as ensuring access to cash to vulnerable people and supporting projects. Amidst the debate over cash, the Bank of England announced that they have good reasons to move to the next stage in contactless payments by launching their own digital currency.