Cash Dispensing: Fees and Charges

Treasury written question – answered on 23rd January 2023.

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Photo of The Bishop of St Albans The Bishop of St Albans Convenor of the Lords Spiritual

To ask His Majesty's Government what steps they are taking to tackle the increased cost to people in deprived areas caused by the prevalence of pay-to-use cash machines in these areas.

Photo of The Bishop of St Albans The Bishop of St Albans Convenor of the Lords Spiritual

To ask His Majesty's Government whether they intend to introduce a statutory right to pay for goods and services in cash; and if so, whether this would be subject to financial limits.

Photo of Baroness Penn Baroness Penn The Parliamentary Secretary, HM Treasury

Regarding cash machines specifically, LINK (the scheme that runs the UK's largest ATM network) has commitments to protect the broad geographic spread of free-to-use ATMs and is held to account against these commitments by the Payment Systems Regulator. LINK has committed to protect free-to-use ATMs more than one kilometre away from the next nearest free ATM or Post Office, and free access to cash on high streets (where there is a cluster of five or more retailers) that do not have a free-to-use ATM or a Post Office counter within one kilometre.

More broadly, the government recognises that while the transition towards digital payments brings many opportunities, cash continues to be used by millions of people across the UK, including those who may be in vulnerable groups.

The government is currently taking legislation through Parliament as part of the Financial Services and Markets Bill to protect access to cash across the UK. The Bill will establish the Financial Conduct Authority (FCA) as the lead regulator for access to cash and provide it with appropriate powers to seek to ensure reasonable provision of withdrawal and deposit facilities.

The Bill requires the Treasury to publish a policy statement that sets out the government’s policy on cash access services. The Economic Secretary has stated that the policy statement would be the right place to consider matters such as location and cost. The FCA will be required to have regard to the Treasury’s policy statement when exercising its regulatory powers. In addition, the FCA will be able to exercise its powers in order to address local deficiencies in the provision of access to cash that it has identified and considers to be significant, and any wider issues it considers to be significant (which may include cost).

With regards to cash acceptance, this remains a commercial decision for individual businesses and the government has no plans to mandate the acceptance of cash. However, the government’s view is that the Bill will support local businesses to continue accepting cash by ensuring they have reasonable access to deposit facilities.

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