Free cash access rules welcomed

Britain’s banks face fines if they fail to provide free access to cash withdrawals for businesses and consumers.

A new government policy, unveiled this month, will mean that free cash withdrawals and deposits must be available within one mile for people living in urban areas.

In rural areas, where there are concerns over ‘cash deserts’, the maximum distance is three miles.

The government’s Cash Access Policy Statement has been welcomed by small business.

In the statement the Treasury said: “The government recognises that digital payments may not yet be a suitable option for many people who still rely on notes and coins, for example to manage their finances, do their shopping, or to help out friends and relatives.

The government also recognises that businesses need access to cash deposit services in order to keep accepting cash and, therefore, support people’s ability to continue to transact using cash.”

The Federation of Small Businesses (FSB) says the plans to access cash are a good foundation to build on but more detail is needed.

Martin McTague, national chair of the Lancashire headquartered organisation, said: “We welcome these plans in principle, although we await further details of how many aspects – not least the three mile rule – will be implemented.

“Making sure that as many people as possible have reasonably easy access to cash is important for all kinds of reasons, and cash as a payment method is seen as key by many small firms.

“Cash is vital as a competitor to card payments, with some small firms baulking at the fees charged by the card schemes. And if IT systems go down, or in areas of poor reception, cash is an indispensable back-up, allowing transactions to continue.

“Small businesses which accept cash need to know there will be a way for them to pay it in without having to go miles out of their way, with all the costs and extra risks that entails.

“We are supportive of initiatives such as banking hubs and the Post Office pilot, where more banking services are available over the counter, although neither are a perfect solution in all cases.

“There is still a strong role for cash in the economy, and in many small businesses’ operations. This statement is an encouraging sign, and small firms will look to next steps from the government and from regulators with interest.”