Why we we need a law change to protect free access to cash

Scottish Co-operative MP Ged Killen says that free-to-use ATMs are a “cornerstone” of essential services, and is working to change the law to protect free access to cash.

Communications & Digital Officer


As online banking becomes ubiquitous and the use of debit cards begins to overtake that of old fashioned cash, it's easy to proclaim the arrival of a 'cashless society'—with banks themselves among the loudest cheerleaders.

For the banks, these developments make sense. They provide a welcome excuse to unburden themselves of the expense of running physical branches, or the need to cover the costs of free cash machines for their customers. While these moves might be presented as progress, they happen to be very lucrative too.

But as the big shareholder-owned banks chase easy profits by abandoning services they've provided for decades, it's communities that are paying the price.

Just weeks after announcing profits of £752m, yesterday RBS bank announced the closure of 162 branches, with the loss of 792 jobs. The RBS announcement follows an announcement in January by LINK, the largest network of free-to-access cash machines, that it will slash the fees which card issuers pay towards the cost of maintaining them—a move which could see almost half of all free cash machines disappear.

Why cash still matters

After LINK failed to run a public consultation on its plans, consumer body 'Which?' stepped in, carrying out research of its own which highlights the extent to which many communities still rely on cash.

In Scotland,  9 out of 10 people describe free cash machines as 'important to their everyday lives', with 51 per cent of these saying free ATMs are 'essential' to their day-to day-living.

Many of the communities worst affected by closures are in rural or economically deprived areas, and as anyone who has ever spent time searching for an ATM or paid exorbitant fees to take out their money will know, having cash in your pocket still makes a big difference.

Such communities are more likely to have independent shops and traders who lack card payment processing facilities, and to have residents who work in sectors where wages are paid in cash, or to have incomes which can sorely afford withdrawal fees that are sometimes in excess of £2 a go.

Without easy access to a cash machine, let alone a branch, they're more likely to remain outside of the banking system altogether—making it harder in the long runto access mainstream financial products such as affordable credit or mortgages.

Protecting access to cash

It's time to be clear that banks have wider set of obligations to their customers and society beyond maximising returns to their shareholders.

Later this month, Co-operative MP Ged Killen, whose Rutherglen and Hamilton West constituency has seen swathes of branch and cash machine closures, will introduce a Bill in Westminster to protect access to free cash machines. Under his plans, there will be a legal requirement for free ATM services to be maintained where there remains sufficient demand.

Speaking about his Bill, Ged said:

“Access to cash remains a vital part of everyday life for Scots. It is clear from the 'Which?' research that free to use ATMs are a cornerstone of the essential services we need in Scotland.

“This is despite plans by LINK to reduce the numbers of free to use ATMs which I believe could devastate the ATM network and serve to disrupt and inconvenience the lives of thousands, particularly in rural and deprived areas of Scotland.

“I have been campaigning against these closures and plan to introduce a bill at Westminster later this month which will aim to protect free access to cash by creating a legal requirement for free ATMs while there remains sufficient demand for their services.

“There has been a worrying trend across the financial services sector of a push for online. I accept that the world is becoming digital however the closure policies of LINK and banks such as RBS are not in line with existing demand for physical financial infrastructure. Their push for online risks becoming a self-fulfilling prophecy leaving many consumers behind and cut off from the services they need."

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