Maintaining access to cash

Link, the UK’s main ATM network has invested £1 million in this initiative which is a part of its Financial InclusionA process by which individuals and businesses can access appropriate, affordable, and timely financial products and services. These include banking, loan, equity, and insurance products. While it is recognised that not all individuals need or want financial services, the goal of financial inclusion is to remove all barriers, both supply side and demand side. Supply side barriers stem from financial institutions themselves. They often indicate poor financial infrastructure, and include lack of ne... More Programme which includes maintaining the coverage of free-to-use ATMs in the most remote and rural locations as well as improving free access in the most deprived areas of the UK. According to the 2019 Access to cash Review, 47% of the UK population believe it would be personally problematic if there was no cashMoney in physical form such as banknotes and coins. More in society, while 17% are either unsure of how they would cope or would not cope at all.

In October 2019, LINK, announced the launch of a Community Access to Cash Delivery Fund so consumers can request a free ATM when it’s needed. Local communities apply through their MP, local council, or request help directly from LINK. The criteria to access the funding include distance to nearest free ATM, availability of a Post Office, site security and that there is a suitable location.  The number of ATMs in the UK has peaked in 2015 at just over 70,000 devices but almost 10,000 ATMs have been closed since.

Source: Link

The new pilot will launch in October, for 6 months, in 15 shops in England, Scotland and Wales. Retailers will receive a transaction fee for every withdrawal which is based on the LINK ATM interchange feeA fee paid between banks for the acceptance of card-based transactions. For instance, a merchant’s bank (acquiring bank) will pay an interchange fee to the cardholder’s bank (issuing bank) when the latter makes a transaction. This is also the case when a cardholder uses an ATM: the cardholder’s bank pays a fee to the ATM operator. More. If successful and if supported with an appropriate regulatory framework, LINK could roll-out this service to allow thousands of shops to provide free access to cash to local communities without the need for an ATM.

Cash-in-Shop

Consumers will be able to withdraw banknotes as well as coins, using their debit card, without making a purchase. This flexibility allows for lower value withdrawals as the amount is not restricted by the denominations dispensed by the ATM. The European Payments Council has defined ‘cash-in-shop’ as a solution allowing a customer to withdraw cash from their paymentA transfer of funds which discharges an obligation on the part of a payer vis-à-vis a payee. More account using a mobile application on their smartphone at a participating shop supporting the application. Contrary to cashbackA service whereby the customer pays electronically a higher amount to a retailer than the value of the purchase for goods and/or services and receives the difference in cash. It is also a reward system associated with credit card usage, whereby the consumer receives a percentage of the amount spent on the credit card. More, cash-in-shopService allowing a customer to withdraw cash from a payment account using a mobile application on a smartphone at a participating shop supporting the application. Also referred to as a “virtual ATM”. Unlike cashback, a cash-in-shop transaction does not require the consumer to make a purchase. More solutions do not require the customer to also purchase goods and/or services to make use of the facility.

Link CEO John Howells said: “This is a first in the UK and could prove to be an important measure for keeping cash viable. Assuming consumers agree this is a useful new channel, it will be important that government and regulators create an effective regulatory framework to enable a full rollout.”

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