Cash must be kept affordable for retailers to handle, industry bodies urge

Retailers must be fairly compensated for providing cash services to their customers – otherwise there could be a lack of places where shoppers can use banknotes and coins, industry and consumer bodies have said.

Shops should not be experiencing higher costs for providing vital services to communities such as ATMs and cashback, the British Retail Consortium (BRC) and other bodies argued.

The BRC said retailers such as the Post Office have increasingly been called upon to stand in for banks, as ATMs and bank branches have disappeared.

But it said shops are finding it increasingly difficult to secure basic cash services, such as store collections, while the cost of services levied by banks and other providers has increased.

The BRC argued forcing retailers to hold large amounts of cash also increases the risk of crime, raising insurance costs and putting pressure on consumer prices.

Andrew Cregan, payments policy adviser at the BRC, said: “With cash services increasingly difficult to obtain and the cost of these services rising, the BRC is calling for fair compensation for retailers providing financial services to their customers which will in turn protect access to cash for many vulnerable people.”

The BRC is making a joint call for action alongside other bodies such as Which?

It said there are 10,000 fewer ATMs in operation than in 2017 and 3,000 fewer branches than 2015.

Gareth Shaw, head of money, Which? said cash acceptance should be closely tracked: “As protecting access will be undermined if there is nowhere to spend it – and would exclude some of the most vulnerable in society from being able to pay for vital products and services.”

The UK Government has previously outlined plans to legislate to protect access to cash.

It has been seeking views on how it can ensure the UK maintains an appropriate network of cash facilities – including the potential role of cashback in shops – as well as the factors affecting cash acceptance.

The joint call for action from the BRC and Which? is also being made by the Association of Convenience Stores (ACS), the Federation of Small Businesses (FSB), and the British Independent Retailers Association (Bira), as the Government’s call for evidence on access to cash closes.

Cash use has been falling in recent years and there have been signs that the coronavirus pandemic has accelerated the decline, as people use contactless payments more often and go online to do their shopping.

But the BRC said cash purchases totalled £78 billion in retail sales last year. It said cash remains an important method of payment, with 2.2 million people entirely dependent on cash in the UK.

Jeff Moody, commercial director, Bira, said: “With so many high street banks disappearing, more and more retailers are being seen as local cash access points.

“However, retailers should not be experiencing higher costs in providing this service and we look to Government to ensure that the costs associated with cash handling and availability are taken into account in any review.”

Martin McTague, FSB national policy vice chairman said: “Four in 10 small high street firms say cash is still the top payment method of choice among customers.

“By protecting access to cash and making it affordable and safe for small firms to handle, we’re supporting local economies and society’s most vulnerable. It’s important that, alongside Government legislation, we trial new routes through which cash can reach those who need it in ways that work for all.”

James Lowman, chief executive of the ACS, said: “Where local shops are able to provide cashback, they should be appropriately remunerated for that service.

“Whether it’s providing ATMs or cashback, retailers cannot be expected to offer these services at a loss.”