According to a new rule, banks will have to make sure that it is easy for people to withdraw cash without any hassle from September; otherwise, they will be in deep trouble and might be fined. Even though many people in the UK are using their cards and online payment methods nowadays, cash remains very popular.

The FCA has today announced that from 18 September, banks and building societies must assess if communities have adequate access to cash access points, including branches and ATMs. Where this is found not to be the case, banks must take steps to remedy this.

If requested to do so by local areas, banks will be required to take steps that ensure people can still access basic banking services to deposit and withdraw cash in the first instance. If a bank or an ATM closes, the bank must keep it open until they find a replacement.

The FCA warned that banks failing to act in line with the rules could be hit with major fines. This new plan relates to 14 of the largest banks on the high street. It would mean that access to cash would be reviewed every two years to make sure everybody gets the cash they want.

Hundreds of bank branches have closed in the past few years—around 6,000 since the financial crisis—with banks saving money and more people using online banking. But some communities, particularly in rural areas, don’t have easy access to cash anymore.

These closures have hurt older people and those who aren’t comfortable with technology the most. Even though more people use contactless payments and contactless apps like Apple Pay and Google Pay, cash is still very important.

A report in 2023 indicated that, though slightly decreasing in use, cash remained the second most popular payment method. In 2023, more users, about 1.5 million, have started increasing their usage of cash compared to 2022. Maybe this may be due to the fact that cash helps manage one’s budget well with prices rising on almost everything.

In all, 12 percent of all payments in 2023 were made in cash, against 14 percent in 2022. Contactless remained the most popular way to pay, accounting for 38 percent of all payments. The usage of mobile payments also went up by 12 percent.

The FCA is not unduly concerned about access to cash for people, as the new banking hubs and Post Office services are filling some of the gaps left by the closure of branches and ATMs. It was reported in June 2023 that 95% of people in the UK live within one mile of a free-to-use cash machine or Post Office. Nearly everybody—99.7 percent—lives within three miles of one.

The Post Office has been blighted by problems, providing customers with access to cash and basic banking. The Post Office has been criticized over its treatment of workers and its demands for more money to provide the services.

According to Sheldon Mills, the director of FCA, “Three million people still rely on cash, even though more people are using digital payments. Many small businesses also need to deposit their daily earnings safely. That is why we have acted quickly to put in place these new rules—to make sure that people can still get easy access to cash.”

People have a lot of choice about how they pay. Debit cards, and in particular contactless payments, are very popular due to new technology and customer demand. An increasing number use mobile payments,” said Adrian Buckle from UK Finance.

He added, “Even while using less and less cash nowadays, it is still the second most used method of payment in the UK. We view the use of cash going down over the coming decade, with other alternative methods of payment, such as cards and Faster Payments, increasing. Developments in new payments will also facilitate things for customers.”

These changes demonstrate that, even while the way in which we pay is changing, access to cash is still of huge importance to many. It is on banks to ensure that the public has access to cash whenever it is needed.