Last updated: 26 November 2020
We think it’s important that everyone has a good choice of how to make payments, in ways that work for them. While UK consumers and society are increasingly using a wide range of ways to pay, being able to pay with cash remains important.
Use of cards and other digital methods is increasing – cards are now the most frequently used payment method in the UK. However, our research shows that over 80% of us pay for something using cash each week and there is a significant minority who, for a range of reasons, remain reliant on paying in cash.
Our overall objective is to support cash access which meets the needs of anyone making payments, including widespread geographic access, for UK consumers who need or want to use it as a payment method.
What are we doing?
We’re carrying out a programme of work to make sure people can make payments in the way they want.
Maintaining a widespread geographic network of free ATMs
We’ve already undertaken a significant piece of work with LINK – the UK’s biggest ATM network – to make sure it delivers on its commitment to maintain the existing geographic spread of free-to-use ATMs for cash access. This involved using our regulatory powers and we gave them a Specific Direction at the end of 2018 (Specific Direction 8).
To make sure it was working well, we conducted a review of our Specific Direction 8 (SD8) at the end of 2019.
In October 2019, we published a Call for views on our Review of Specific Direction 8 (SD8). The review was an opportunity to hear the views of stakeholders and reassess LINK’s commitment and its related procedures, processes, policies and measures under SD8.
In March 2020, we published the outcome of our first Annual Review of SD 8, where we concluded that SD8 should stay in place for the time being.
Wider programme of work
We also have a wider programme of work that is seeking to answer the following questions:
Why do people want to use cash to pay?
We want to understand the different reasons and extent to which people rely on cash. This helps us to better understand how their need to access cash can be best met now and in the future.
What are the economics of providing people with access to cash?
We want to better understand the costs and other incentives that can affect the different ways cash is, or could be, supplied.
What are the options for reform?
We want to identify how existing ways to access cash might need to evolve to meet people’s needs and consider whether new alternative provisions are needed, and how quickly they might be delivered.
Our work programme
Our work on access to cash covers a number of complementary areas. We update this web-page as our work in these areas progresses, taking into account our developing analysis and information we receive from stakeholders.
As you would expect, throughout this work we are closely engaging with government and other relevant authorities, the industry, consumer groups and other stakeholders with an interest in cash. In particular, it is important that all of these areas of work are considered in the context of the wider cash system.
The work across the different parts of the cash system is being co-ordinated through the Joint Authorities Cash Strategy Group, chaired by HM Treasury, that was announced on 3 May 2019. This brings together government, the FCA, the Bank of England and the PSR.
Creative, practical and sustainable solutions will need to be developed that work for people while meeting the economy’s need for cash in the medium to long term. The Chancellor is expected to announce legislation to ensure those who rely on cash, including vulnerable groups and local communities across the UK, can access it as and when they need it. We will be working with the other authorities to support this work.
We also know that industry will want to, and should, continue to develop their own ideas and proposals to improve how their services meet the needs of their customers. We, and the other authorities, will continue to support and scrutinise these initiatives.
We will continue to work closely with industry, regulators, government and consumer groups in this respect, including to understand how market developments affect the need for, and nature of, any further regulatory interventions.
Specific areas of work
Consumers’ and society’s cash needs
We want to understand consumers’ and society’s cash needs, and the factors that drive their demand for cash and how they access it now and in the future.
We commissioned market research exploring consumers’ and businesses’ cash needs and their views on different ways of accessing it and have published these findings, along with a Call for Views on ’The PSR’s research into cash access, use and acceptance’, to build on the debate (including the Access to Cash report) as to what is needed to support cash access which meets the needs of consumers. We invited people to share their views on this research and on the implications of these findings, for which we received a number of responses.
We hosted a roundtable event in October 2019, attended by industry, consumer groups and other regulatory bodies, to discuss our evolving thinking in this area, taking the responses to our Call for Views and market developments at the time into account.
Of particular interest to the PSR is how best to understand how cash use may evolve, and to help ensure a network of cash access services which meets people’s needs long term. We published the responses to our Call for Views and summary of our roundtable discussion in March 2020.
We will work with other authorities and anyone who has an interest in this area to assess proposals for how cash needs can be met.
Considering the different ways of accessing cash
We will look to establish what costs and other factors need to be taken into account in giving access to cash.
Today ATMs are the main way people access their cash so our immediate work in this area will look at the incentives involved in providing ATMs (see below). But it is important to recognise the pace of change in people’s and businesses’ use of cash and other payment methods, and the potential for innovation in how cash is provided. Other ways of providing cash access will be increasingly needed to complement the use of ATMs in finding sustainable long-term models for providing access to cash services.
We are building a picture of the range of existing and potential methods of providing people with their cash, whether they operate on a level playing field and whether there are barriers to their further development and use. We will explore whether any such barriers could be reduced or removed. Enabling and promoting innovative methods of accessing cash continues to be an important aspect of the wider work.
We are also exploring how community needs can be reflected in decisions affecting the provision of access to cash. Injecting a community voice into the provision of access to cash services to help make sure specific local needs are met is vitally important.
For example, we know that the impact of not having access to cash can be worse in areas of social deprivation and where digital payments do not work well (such as remote towns). These considerations – alongside others – can guide decision-making so that actions reflect need.
We have welcomed steps by industry – such as LINK and UK Finance – to secure greater involvement of local communities, and we will be monitoring how these develop closely.
Incentives for future ATM provision
Turning specifically to ATM provision, we want to make sure there are robust incentives in place for ATM operators so that machines are provided in the areas where people want or need them.
As part of this work, we published a Call for Views on ‘Considering the incentives to deploy free-to-use ATMs in the LINK network’ on 6 June 2019. We looked at why ATMs are placed where they are in different areas of the UK and what factors might affect where they are placed, focussing on the structure of the interchange fees. These fees are, largely, funded by banks and, ultimately, paid for by us all as the customers of banks. We wanted to identify the extent to which interchange fee reform could better ensure ATMs are provided where they are most needed given the changes in usage of cash - or whether other approaches may be needed.
We received a number of responses and hosted a roundtable event in July 2019, attended by industry, consumer groups and other regulatory bodies. We published the responses to our Call for Views and a summary of our roundtable discussion in September 2019.
We are carefully considering what role LINK interchange fee structure, and the incentives to deploy ATMs more generally, play in supporting widespread access to cash that meets consumers’ needs long term.
Interaction with the wider cash system
Working closely with other authorities, we consider these issues in the context of the overall cash system – wholesale and retail – and how different ways of accessing cash might interact. It is important to ensure that all the different aspects of the overall cash system work well together to provide better outcomes for consumers and businesses.
We will provide additional detail of our work in this area in due course, but we expect to look at what lessons can be learned from other countries, work with industry on monitoring where gaps in provision might occur, and explore how local communities can have a voice in ensuring they have appropriate ways to access cash.
We also support the work of other authorities, especially the Bank of England, FCA and HM Treasury, in developing future wholesale cash arrangements, the ease and cost of accepting cash and looking at making digital alternatives available for a broader range of consumers.
Mapping coverage of access to cash across the UK
The PSR and FCA worked with the University of Bristol to develop a comprehensive map of access points across the UK – using data provided by industry. The report maps bank and building society branches, Post Offices, free-to-use and pay-to-use ATMs and, for the first time, locations where cashback has been accessed. The research was funded and supported by LINK, with addition support provided by UK Finance and the Post Office.
The findings from this research build on earlier work by the PSR to understand the gaps in the provision of access to cash. This includes joint research with the FCA to understand the spread of access to cash from ATMs, bank branches and Post Offices. The PSR and FCA also undertook joint work with the industry during the Covid-19 pandemic in Spring 2020 to monitor the emergence of areas where the population temporarily lost access to cash due to the government Covid-19 restrictions for Covid-19.
Long-term solutions for ensuring future cash access
We have been working with industry to identify and develop sustainable solutions to make sure people have access to cash over the longer term.
This will consider the current and future cash needs of both consumers and SME customers, gather perspectives of different stakeholders, identify suitable options and what would be needed to deliver those.
Our work in this area will help inform discussions with HM Treasury and other authorities, following the announcement of legislation to protect access to cash that meets the needs of UK consumers in the 2020 Budget.
How to contact us about this work
We are interested to hear all views and evidence that will help to inform our work on access to cash. You can send any comments to PSRcashaccess@psr.org.uk.
News, announcements and speeches
CP19/6: Responses to our Call for Views on our research into cash access, use and acceptance, and summary of our roundtable discussion
We are publishing a summary of the roundtable discussion we held on 9 October 2019 on our research into cash access, use and acceptance.
Chris Hemsley's speech at the Westminster Business Forum - 23 January 2020
This is the text of the speech as drafted and may differ from the delivered version.
The UK's ATM network