The UK Bank Hub provides a lifeline to those struggling in a cashless society | Daily News Byte

For Jason McCarey, a butcher in the English town of Rochford, the cash is coming back.

Rochford in Essex is one of two towns – the other is Cambuslang, outside Glasgow – chosen to run a pilot project to improve access to cash as banks close branches to cut costs. Under the scheme, lenders jointly staff the hubs managed by postmasters on a rotating basis.

For many of Macari’s customers, the hub, which launched in early 2021, has become a lifeline. Cash now accounts for 50 percent of its daily withdrawals, almost double the same time in 2021.

“People find it easier to budget with cash in their pocket, and everyone’s budget is tighter,” he said, adding that paying suppliers is also important for businesses.

The coronavirus pandemic has accelerated a long-term trend towards a more cashless society, with brick-and-mortar retailers and the hospitality sector embracing digital payments.

But during a cost-of-living crisis, a growing number of households are turning to cash as a budgeting tool as they struggle to cope with rising price increases.

However, many have struggled to access coins and notes as banks have closed large parts of their high street networks as part of a cost-cutting drive that has left fewer than 6,000 branches across the UK, more than half the number two decades ago. but less.

“We’re in a financial environment where people who didn’t care about budgeting now have to,” said Derek French, a former bank executive who led the campaign for community banking services. “The [cash access] The problem is growing, and the solutions are nowhere near fast enough.”

In 2018, an independent Access to Cash review funded by ATM operator Link began exploring how cash could be saved, with Bank Hubs proving to be its most successful project.

The UK government first said it would introduce legislation to protect access to cash in the 2020 Spring Budget. However, the Financial Conduct Authority watchdog is only to get powers to enforce that duty with the Financial Services and Markets Bill currently going through Parliament.

With more than a quarter of people in the UK using cash more than once a week and around 10 per cent, or around 5 million, using it every day, campaigners warn that upcoming laws on cash use should be strengthened to protect them.

Last month, the head of the UK’s financial regulator criticized banks for being too slow to roll out banking hubs. FCA chief executive Nikhil Rathi said, “We want to look at banking hubs and alternative forms of provision faster.”

Jaime Bush, owner of The Square, a cafe in Rochford, said the pilot hub had become vital to his business. “We have a lot of the older generation coming in especially on Tuesdays [when Rochford has its market day],” he said. Without access to a hub, he would have to make a 40-minute round trip by train to the nearest town, Southend-on-Sea, to deposit his transactions.

“It’s also easy to change—the entire register can be empty by noon.”

But new hubs are slow to launch. Two opened their doors earlier this month in Brixham, Devon and Cottingham, Yorkshire – the first to launch since the pilot scheme despite 27 planned sites being announced in the past year.

French estimates there are at least 100-150 communities across the UK that need a hub and expects that number to rise. He said the pilots had already shown that offering banking services had wider benefits, such as revitalizing struggling high streets.

“The [Access to Cash review in December] It was very crucial – the hubs not only catered to the cash needs of individuals, but fed back to the towns, which was very useful for everyone.”

Frustration over the hub’s slow rollout is partly due to the model’s complexities, according to Natalie Seeney, who chairs the Cash Action Group, which led the pilots.

“Establishing new services takes time, especially when it involves banks joining forces to share new infrastructure,” she said.

Jeff Mitchell at CleanSlate, a non-profit group that works with low-income households, warned that while the pandemic has made cash less relevant for many retailers and businesses in the hospitality sector, it remains crucial for many.

“A pub, bar or restaurant that is card-only. . . Reinforce the false assumption that everyone can live their lives this way.

According to the British Retail Consortium, some of the UK’s biggest supermarket chains, including Aldi and Tesco, are running trials with cash-free and checkout-less stores, with cash accounting for 15 per cent of retail spending.

But countries on the road to a cash-free society, such as Sweden, have discovered the challenges of this approach. Meaning the dwindling number of shops accepting notes and coins 600,000 The country’s 10 million people struggle every day, said Gabriela Guiberg, head of analysis and policy at the Riksbank, the Swedish central bank.

“We get a lot of calls . . . ‘How am I going to deal with this?’ telling, especially from the very old,” she said. “Those people should have access to fair payment.”

The UK Treasury said it was “fully committed” to protecting access to cash, and Prime Minister Rishi Sunak told MPs on Wednesday that the legislation represented a “significant intervention” in the financial services and market bill and remained a priority. Govt

But French urged ministers to give more powers to the FCA so that banks can speed up the establishment of more hubs.

“The legislation has been a long time coming and it’s not as strong as it should be – if you’re responsible for these things in a bank, you’ll be rubbing your hands and saying ‘Come on. [the status quo] go there’.”