Free-to-use ATMs in local shops and other locations will gain new protections from being removed under new powers to be introduced in September.

The Financial Conduct Authority (FCA) has been given new powers by the Labour government to make sure local communties have access to cash from September, with bank branches, Post Office (PO) facilities, and ATMs required to remain open in areas considered in need of the services.

The landmark move by FCA is amid widespread ATM and bank branch closures, with small businesses and local customers no longer left out in the cold with regards to cash access.

From 18 September, the regulator said major banks and building societies will need to weigh up if local communities lack access to cash and fill any significant gaps.

“Three million people continue to rely on cash, even as digital payments become more popular,” says Sheldon Mills, executive director of consumers and competition at the FCA.

“Many small businesses still need somewhere to safely deposit their takings each day. That’s why we’ve acted quickly in response to new powers given to us by parliament to ensure reasonable access to cash withdrawal and deposits is maintained.” 

The government has designated 14 banks and building societies, including major names such as Barclays, HSBC and Santander, to deliver this new cash access system. 

While the FCA is unable to order banks to keep branches open, from 18 September the regulator will assess cash access and understand if additional services are needed when changes are being made to local services.  

Additionally, they will have to respond to local residents, community organisations and representative groups who will be able to request an assessment of whether there are gaps in local cash access. 

Where significant gaps are found, banks and building societies will need to deliver reasonable additional cash services and keep facilities, including bank branches, PO facilities, and ATMs, open until any additional cash services identified are available.  

Ross Borkett, banking director at PO, said: “We are delighted to see the publication of the new access to cash regulations to give consumers and businesses more certainty around the future of cash in the UK. Post Office will continue to play its role at the heart of the nation’s cash infrastructure, with Postmasters across the UK providing easy access to everyday banking within every community.”

ACS chief executive James Lowman said: “We strongly welcome the prioritisation of access to cash in communities by the FCA, as it plays a huge role in the convenience sector. ATMs are one of the most essential services provided by convenience stores, particularly in rural areas where bank branches are increasingly scarce.

“We believe that a full review of ATM interchange fees is needed to align with the FCA’s efforts to protect access to cash. We need to ensure that the financial constraints faced by retailers who want to provide this service to customers are addressed so that customers are able to pay for what they need, retailers are able to provide for their communities free from financial constraints, and there are fewer free-to-use ATMs switching to pay-to-use as a result.”

The importance of cash was also highlighted when nationwide IT outages meant many retailers lost custom as they couldn’t take digital payments.

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