Protect cash by law – or it could be history in months

NOT all news on access to cash falls into the ‘bad news’ category. 

Six days ago, there was a victory when a proposed amendment to a Bill passing through Parliament was accepted by the government – paving the way for retailers to offer customers cashback without the need for them to buy anything in the store. Currently, cashback can only be obtained if someone buys something first. 

As foreshadowed by The Mail on Sunday earlier this month, the amendment to the Financial Services Bill was tabled by Lord Holmes of Richmond, a passionate supporter of ‘inclusion’ in all walks of life, including financial services. 

He believes all consumers should have easy access to cash, hence his determination to get the amendment accepted. 

Last week, he told The Mail on Sunday: ‘To get the amendment through is important and significant. If it had not passed, it would have represented a further fundamental blow to the availability of cash across the UK.

‘Millions would have faced further isolation, financial exclusion and all of the associated negative consequences of such a shut-out.

‘The country’s cash network needs to be seen as a piece of critical national infrastructure. Without this move, the network would have been in danger of catastrophic collapse, perhaps within the year.’ 

Lord Holmes said that come the summer, more shops up and down the country will allow customers to obtain cashback. 

He added: ‘The fact remains that cash still matters and millions of people depend upon it. Yet wider availability of cashback represents just one step among the many we need to take to tackle the issue of financial exclusion. 

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‘The whole financial services landscape needs to be transformed so that people from all walks of life are financially included – whether it’s through access to cash or digital financial services.’ 

Lord Holmes’s success on ‘cashback without purchase’ has been universally welcomed. 

Natalie Ceeney, chair of the community access to cash pilots initiative, said: ‘Giving people more ways to access cash is welcome, particularly for communities which don’t have bank branches and ATMs. But enabling widespread cashback is only a small part of the answer. Retailers still need places to get cash and to bank their takings. Many people need cash out of hours when a retailer offering cashback might be closed. 

‘We need a joined-up approach to both protecting cash and making sure that digital payments are a real option for everyone.’ 

John Howells, chief executive of cash machine organisation Link, said: ‘This is a significant breakthrough and it’s a real win for communities across the UK. Cash machines aren’t going to be replaced by cashback but, as we continue to use less cash as a country, there will be some locations where an ATM simply isn’t economically viable and cashback from the village shop or pub will help to ensure free access to cash – without the need to travel to the nearest town instead.’ 

Baroness Tyler of Enfield said she was ‘absolutely delighted’ that Lord Holmes’s amendment had been accepted. ‘I’m so, so pleased.’ 

New ways of providing cashback without the need for a customer to make a purchase are being tested as part of the community access to cash pilots projects. 

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Last week, Swiss fintech start-up Sonect launched an app that will allow people living in Burslem, Staffordshire (one of the eight chosen cash pilot locations) to order cash – and then pick it up from one of ten local retailers. The ‘click-and-collect’ service is free of charge. 

Ron Delnevo, UK director for Sonect, said the beauty of the app is that it gives customers a ‘guarantee’ that they can collect cash when and where they want it. He is confident that the app will in time be taken up by other retailers – including pubs – and that all the big banks will get four square behind it. 

Gareth Shaw, of consumer group Which?, said cashback was just one of a number of measures required to ensure nationwide access to cash. Legislation to safeguard cash, he reiterated, was paramount.



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