MPs echo Positive Money’s call to give regulator new powers to protect cash

The pressure is growing on the Government to prevent the rapid pace of cash machine closures, which are continuing at a rate of hundreds every month.

Earlier this month, MPs challenged Treasury minister John Glen to do more to stop consumers losing access to their money. A debate organised by Labour’s Ged Killen featured MPs from across the House of Commons.

Now the landmark Access to Cash review has warned that ‘millions of consumers across the UK face being left behind’ in the move towards a cashless society.

During the debate on 4 December, MPs warned that the Payment Systems Regulator has been slow to intervene on consumers’ behalf and called on the Government to beef up the regulator’s powers, and give it a specific ”duty of care” over cash access. This echoes a call made by Positive Money in our recent report, ‘The Future of Cash‘.

These closures are happening after the big banks pushed LINK – the scheme that connects most UK ATMs – for a reduction in the ‘interchange fee’ banks pay each time their customers make a transaction. This has led to many ATMs becoming unviable. Ged Killen MP pointed out that the number of closures has been “far higher” than LINK anticipated, with approximately 250 closing every month.

The Payment Systems Regulator has the power to issue a moratorium on the reduction in LINK’s fees, but has so far failed to do so.

The closure of cash machines is being driven by banks and card companies, rather than changing consumer behaviour. A Positive Money/YouGov poll found that 77% of people view access to a free-to-use cash machine as essential to their lives.

Responding to MPs’ concerns, the Minister reaffirmed the Government’s commitment to ensure that consumers are “free to choose the method of payment that best suits them”, while acknowledging that “people are increasingly moving away from cash and towards digital payments”.

He was hesitant about calls to arm the Payment Systems Regulator with greater powers, arguing that it already has considerable power over the LINK network. He highlighted the action the PSR has already taken, including placing a ‘Specific Direction’ on LINK to preserve the broad geographical spread of free ATMs and to report to the regulator on a regular basis.

The PSR has focused on preventing the closure of a small number of ‘protected’ ATMs, which are free-to-use machines located 1km or more from the nearest free machine. Dozens of these machines have closed in 2018, despite their protected status. But even if the PSR were successful in saving the remainder, the majority of ATMs without the special status would still be at risk. Many areas could be left with just one ATM, which would fail on average nearly two days each month.

The pressure on the Government is set to grow. The powerful Treasury Select Committee is investigating the effect of ATM closures on vulnerable consumers, and its chair Nicky Morgan has warned that a “significant reduction in free access to cash would be an unacceptable outcome”.

If you agree that the Government must act urgently to stop ATM closures, share this briefing paper with your MP and ask for a meeting to discuss your concerns. You can find their details here. Get in touch if you’d like some support.