UK Government has no plans to force businesses to accept cash, MPs hear

The UK Government has no plans to force businesses to accept cash, MPs have heard.

Economic secretary to the Treasury Emma Reynolds was speaking to the Treasury Committee as part of its inquiry into cash acceptance.

She told the hearing: “We have no plans to regulate businesses to compel them to accept cash – big or small.”

When it was put to her that certain marginalised people could be excluded, she said: “I think our solution to that, through the financial inclusion work that we’re doing, is to try to tackle digital exclusion.”

Anna Harvey, deputy director of payments and fintech at the Treasury, told the hearing that there may be some solutions around payment technology, “so, you know, you can get rather than a debit card, you can get some sort of pre-payment cards where money is loaded”.

‘Important’

Ms Harvey added: “But I completely appreciate and definitely agree that cash is really important to a lot of people and a lot of vulnerable people in particular.

“And the FCA’s (Financial Conduct Authority’s) statutory access to cash regime is there because the Government recognises that and wants to ensure that the cash infrastructure is in place so that people can continue to access it and businesses can continue to use it as far as possible.”

Bank branch and ATM closures have prompted concerns around the ability to use cash, as have the struggles among some people to pay in cash for goods and services such as shopping and parking.

People in vulnerable groups may be particularly reliant on cash, such as some people fleeing domestic abuse, some elderly people and some people with disabilities.

Banking hubs

Various initiatives are under way to protect access to cash, such as banking hubs where banks share a single space on a high street. The Post Office also has an agreement with banks, allowing many people to do their day-to-day banking over its counters.

Ms Reynolds later added: “I think we’re saying that businesses should have the flexibility to offer the choice in payments that they think their customers need and that we are not minded or we don’t have any plans to regulate to force business to accept cash.

“But we do know that there are many businesses who still do.”

Ms Reynolds told the hearing: “We have a world-leading financial services sector and the role of innovation and technology is absolutely central to its success.”

She added: “We’re very committed to ensuring that we push forward with financial inclusion.”

Ms Reynolds also said she is “very keen” to work with the banks to ensure that they are taking practical measures to help people.

She also highlighted the role of banking hubs in helping personal and business banking customers.

She said it would be very difficult to come up with a plan to compel only businesses which provide essential services to accept cash, “precisely because it’s so difficult to define… where would it stop and where would it end?”.

Asked what she would say to vulnerable groups who want assurance that cash will always be accepted, Ms Reynolds said: “As I’ve said, the focus of the Government is on the access to cash regime, which does relate to the acceptance of cash, because if businesses don’t have places to go to deposit cash, that’s when they stop accepting cash.

“So, we’re absolutely determined to ensure that banking hubs and deposit machines are available to small businesses.”

She later emphasised: “We don’t have a plan to go towards a cashless society. Yes, we do want to ensure that we’re at the leading edge of innovation and we do want to combat digital exclusion but we think there is a role for cash going forward, otherwise we wouldn’t have been committed to the access to cash regime and to 350 banking hubs.”