Protecting access to cash in an increasingly cashless society

A blog post by Consumer Scotland Policy and Advocacy Officer David Jackson


Research on consumer spending methods shows a growing trend towards paying for goods and services using debit card and contactless payments as opposed to cash.

The percentage of payments made using cash has been in steep decline over the past two decades, decreasing from 61% of payments in 2007 to just 14% in 2022. This decline was accelerated by the Covid pandemic, when periods of lockdown meant many shops and businesses closed their doors and consumers made greater use of contactless payments, online banking and mobile wallet payment options. Although there are signs of a high-street revival in shopping trends, online sites remain a popular and convenient way to shop. As a result, projected levels of cash transactions are forecast to fall by around half by 2032.

However, despite this move to a more cashless society, there are still consumers for whom access to cash is important – for example, older consumers who have grown up using cash and who are less familiar with the alternatives. And more recently the ongoing challenges consumers face due to inflationary pressures and the cost of living have led to an increase in cash usage for the first time in a decade. This is, in part, influenced by those on low incomes searching for ways to manage limited budgets effectively, while some experiencing different vulnerabilities remain more reliant on accessing and using physical cash.

Given these circumstances, there are clear risks for consumers that when a local facility for cash withdrawals - be it an ATM, bank or Post Office branch - closes or reduces services, that those more reliant on cash could face harm. The risk is even greater given the dramatic rate of bank branch and ATM closures in Scotland. Between 2015 and 2022, 53% of Scotland’s bank branches closed, the highest rate of closure of all UK nations, while 20% of free-to-use ATMs closed between 2018 and 2022.

Access to cash consultation

In this context, the Financial Conduct Authority (FCA) recently ran a consultation for new proposals on how communities across the UK can maintain access to cash and how  communities should be engaged in any process of making significant changes to provision of cash facilities in their area.

Under the FCA’s proposals,  service closures or reductions will be treated as a “trigger event”. When these occur, local banks and building societies will be required to assess whether remaining cash withdrawal facilities will be sufficient and to provide alternative services where necessary. In an attempt to empower consumers, the new rules will allow members of the local community to ask for cash access assessments to be carried out if they believe there may be insufficient access to cash in the area. This approach strikes a difficult but appropriate balance between recognising the ongoing decline of cash use, while recognising that, for the foreseeable future, a minimum level of access to cash must be maintained for many consumers.

The Scottish context

The FCA’s proposals apply across the UK, but it is important to note, as we did in our response to the consultation, that Scotland’s unique geography means this policy will have particular relevance for consumers in Scotland. Scotland has a higher prevalence of remote, rural, and island communities than the rest of the UK, meaning the impact of branch closures and reduction of cash access services can be disproportionately higher. Accessing alternative sources of cash may require ferry journeys, access to a car, or may also be affected by extreme weather events damaging local road infrastructures.

Therefore we support extra consideration being given to the needs of remote communities in any guidelines developed for banks and building societies about how they undertake cash access assessments, to build in extra resilience.

Keeping consumers informed about how they can access cash is a key pillar of the FCA proposals, and one Consumer Scotland regards as crucial. We have advocated for providers to take a much broader and more comprehensive approach when making significant changes to local cash facilities. It is important that providers work in partnership with key stakeholders in local areas, sharing information by both physical and digital means so that it reaches those who most need to know about any proposed changes.

“Last branch in town” principle

 A key plank of the FCA’s proposals on access to cash is the application of a ‘last branch in town’ principle. This would require that where only one bank or building society remains in a local area, a deeper assessment on whether there are acceptable levels of cash access would be needed. This is especially important given some consumers in vulnerable circumstances require assistance with bank transactions in-branch. Consumer Scotland supports this proposed measure, but also raised concerns about how consumer choice is affected when only one bank operates a branch in a local area. We have suggested that in areas with higher populations or population density more than ‘one branch’ may be necessary - not just to facilitate adequate access to cash for consumers, but also to maintain reasonable consumer choice.


Overall, Consumer Scotland welcomes more formal procedures being proposed to ensure adequate access to cash across the country. A key part of the success of these new formal procedures will be to increase public awareness of them. We have also encouraged the FCA to ensure consistency of approach across the country with more detailed guidance for providers who must carry out assessments of whether access to cash is adequate.

If successful, these measures have the potential to  help maintain a lifeline for those consumers who are still reliant on spending and receiving cash payments. They will also allow local communities to more fully engage in processes which aim to ensure appropriate local access to cash. The implementation of the new approach will be central to its success. The FCA will need to closely monitor the effectiveness of this, particularly during the early period of its introduction, to ensure that these desired outcomes for consumers are being achieved.