The COVID-19 crisis has hastened the trend towards a cashless society, leaving the unbanked population at the risk of loss of financial inclusion. Amidst these concerns, a group of eight communities will trial new proposed solutions that will help to solve issues with access to cash.
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Some of the ideas put forth for the trials have been the establishment of banking hubs in retail spaces or churches, pop-up Post Offices in smaller shops, and cashback from convenience stores without the need to make a purchase.
Plans for these trials followed the release of a recent report by the Access To Cash Review, which highlighted the significant portion of the UK who still rely on cash-based transactions. As per the report, an estimated 8 million people in the UK still transact using banknotes and coins, for reasons varying from unfamiliarity with digital banking, to not having a bank account.
The report highlighted the need for government and financial institutions to provide alternative means of accessing cash. This need is especially acute in smaller communities where the closures of bank branches and cash machines have led to business losses and difficulties in managing daily life for many. Consumer group Which? reported 3,372 closures by banks and building societies in the four years to the end of 2019, further stressing the reality of the shrinking countrywide banking network.
"It is critical that we find ways to protect the viability of cash, for consumers and communities alike," said Natalie Ceeney, author of the report. "These pilots are designed to find sustainable ways to keep cash viable locally, which, if successful, can then be rolled out more widely."
The pilots are set to launch in eight remote locations, including Lulworth Camp in the region of Dorset, the village of Botton, North Yorkshire, Rochford, in Essex, Denny near Falkirk, and Cambuslang in Lanarkshire. In many of these communities, the nearest bank branch or cash machine is several miles away, making it difficult for residents to manage their daily transactions.
Fifteen shops in four of the selected pilot regions will trial the solution of receiving cashback without purchases at convenience stores. The participating retailers will be paid by the payment services company PayPoint in return for providing cashback to customers.
Reports on the progress of the trials will be published in the summer of 2022. If found to be viable solutions to the issue of access to cash, the solutions can be rolled out to even more communities across the UK, ensuring that those who need cash can continue to freely access it when required.