Treasury and FCA confirm approach on access to cash rules

Treasury has published a cash access policy statement setting out the Government’s approach to access to cash deposit and withdrawal services for UK current accounts. The aim of the statement is to inform FCA’s approach to ensuring access to cash.

The Government wants to ensure that the ‘reasonable provision’ of cash access services takes account of potential local deficiencies that may have significant impact, evolving trends and innovations. With respect to personal current accounts, its view is that ‘reasonable provision’ means free cash access services. This does not prelude the provision of pay-to-use services, but the Government does not consider it appropriate for these services to contribute towards ‘reasonable provision’ in relation to such accounts.

In determining what constitutes ‘reasonable provision’, FSMA 2023 requires FCA to have regard to local deficiencies. In doing so, the Government expects FCA to take into account the following factors, as appropriate in the circumstances:

  • types of cash services and nearest alternatives available;
  • hours of availability;
  • travel and geographic factors;
  • demographic factors, such as age and characteristics of vulnerability which may reflect a greater need for cash access; and
  • potential for reliance on assistance with accessing cash that is provided in-person.

It is the Government’s policy that, in the event of a significant change or closure to a cash access service, any proposed alternative identified for the purpose of maintaining reasonable access is put in place no later than when the change or closure takes place.

Following the publication of the policy statement, FCA is set to develop new rules to ensure cash access services continue to be provided on a reasonable basis as they evolve. The new rules will work together with FCA’s existing branch closures guidance, and are expected to take effect by summer 2024.

FCA will consult on rules requiring Government-designated banks and building societies to conduct assessments of the reasonableness of cash provision when certain significant changes in local access occur, or are proposed. It expects the rules to require a designated firm to fill gaps in provision where the assessments conclude the gap will have a significant impact and it is reasonable for the firm to provide an additional service.

FCA also wants the rules to encourage ongoing investment in developing shared solutions, which it hopes could lead to provision of efficient and innovative digital payment solutions, alongside cash solutions, that meet evolving consumer and SME needs.

The policy statement, and FCA’s new powers under FSMA 2023, do not extend to cash acceptance. FCA does not have powers to ask retailers to accept cash as payments, and has confirmed that retailers are free to decide whether or not to accept cash or only digital payments.

Laura Wiles