UK proposes safeguards to protect access to cash. Will Australia follow suit?

In an era where the clinking of coins and the rustle of banknotes are gradually being drowned out by the hum of digital transactions, the United Kingdom’s recent move to safeguard access to cash has prompted questions regarding whether Australia will adopt similar measures to preserve the tangible connection to currency.

The Financial Conduct Authority (FCA) in the United Kingdom has taken a significant step towards preserving access to cash by proposing new rules that mandate reasonable access for both personal and business customers.

Under the FCA’s proposed rules, designated banks and building societies will be required to assess gaps in access to cash, taking into consideration local factors such as demographics and transport infrastructure. If identified, these gaps must be addressed promptly to ensure continued accessibility.

Executive Director of Consumers and Competition at the FCA, Sheldon Mills acknowledged that while more embrace digital forms of payment, there are still millions who “rely on cash”.

“We know that, while there is an increasing shift to digital payments, over 3 million consumers still rely on cash – particularly people who may be vulnerable – as well as many small businesses. It’s important that we support consumers impacted by recent innovations,” Mills said.

“These proposals set out how banks and building societies will need to assess and plug gaps in local cash provision. This will help manage the pace of change and ensure that people can continue to access cash if they need it.”

Under the proposals, specific companies will be required to:

• Undertake cash access assessments when changes are being made to cash access services – to understand whether additional services are required to meet local gaps.
• Respond to requests from local residents, community organisations and representatives to consider, assess and plug gaps.
• Deliver reasonable additional cash services to fill gaps in provision where assessments show that there is or will be a significant local gap.
• Ensure they do not close cash facilities, including bank branches, until any additional cash services identified are available.

As the UK takes the lead in establishing these safeguards, attention turns to Australia, where discussions about the future of cash intensify. Will Australia follow the UK’s example and implement measures to protect access to cash for its citizens and businesses?

While many who still believe cash is king may resist the move towards a cashless society, experts warn that it’s now more than just a possibility, it’s “well underway”.

The move toward a cashless society, once seen as a futuristic idea, is happening much faster than expected and RMIT associate professor in finance, Dr. Angel Zhong believes we could be doing away with cash by the end of the decade.

“The shift towards a cashless society in Australia isn’t just a possibility, it’s already well underway,” Zhong explained in a piece for The Conversation.