90 ACCESS TO CASH Martin McTague, FSB National Vice Chair, Policy and Advocacy, discusses small businesses’ access to cash, and how the pandemic has changed the way we work T he COVID-19 pandemic has no doubt changed the way we live and work. It’s introduced new trends, new ways of working, new approaches to running our businesses – and yet very much cemented other existing trends. Pre-pandemic, cash usage was dwindling, compounded by rapid bank branch and ATM closures. With UK-wide cash infrastructure under threat, access to cash was truly in decline. The pandemic has only intensified this trend, with less and less cash being used during transactions. According to the Bank of England, this is partly due to a fall in consumer spending generally, as lockdowns took hold and social distancing measures were rolled out. It may also reflect concerns about the virus being transmitted via bank notes, although research undertaken by the UK’s central bank showed the risk of this is incredibly low, and no linked cases have been found. But what about those who still use cash? Despite a decline in the overall amount of notes and coins being spent, millions of people still rely on it – and they cannot simply be ignored. In fact, research by the Financial Conduct Authority (FCA) suggests that five million people remain dependent on cash. During the pandemic, around one in seven adults have been struggling without access to cashpoints and bank branches. And these are consumers that are often among society’s most vulnerable. For some, cash is still important and as business owners, we need to make sure customers can still use it. As we know, being able to pop to a counter in the same town or village to bank the day’s takings is invaluable – and makes it much easier to continue to allow access to it. A big step towards this is the Community Access to Cash Pilots (CACP) scheme, which is now fully operational, with 85 organisations working across eight locations in the UK to help test ways that will keep cash supported in local communities. As a member of the CACP Pilots Board, I’ve been working alongside industry and consumer group representatives to talk about and come up with solutions that work for everyone – including small businesses and the self-employed. At FSB we have always said that banking hubs, operated in close collaboration with the Post Office, will be an important part of the access to cash mix in future. The introduction of these hubs is a significant milestone for the pilots programme across communities in England, Scotland, Wales and Northern Ireland, to explore new ways of protecting access to cash. The hubs all offer access to basic banking and cash withdrawals and deposits through a counter operated by the Post Office. Each of the hubs will then be trialling different solutions like cash deposit facilities for small firms and free ATMs. Providing cashback facilities from local shops, restaurants and pubs is another idea being trialled, although where cashback without purchase is concerned, we must avoid a situation where small firms are expected to effectively operate as an ATM without any cash incentive to cover the additional admin and security. The pilot schemes will run until October this year and we are keen to hear what each of the trials has meant for the communities and small businesses that are often at their heart. On top of the great work rolled out with the pilot schemes, we urgently need to look more closely at payments reform. Now we’re outside the scope of EU legislation, interchange fees for card payments must be kept in check. The idea of a Bank of England digital currency for households and businesses is an interesting one, and one that could be positively disruptive. A route through which you can cut out the private banks and card providers altogether would no doubt appeal to many. It could help maintain competition and choice between different payment methods, which would help keep card transaction fees down. By protecting access to cash that millions are dependent on, and making it affordable and safe for small firms to handle, small businesses can truly support their local economies and society’s most vulnerable. ABOUT FSB As the UK’s business support group, FSB is the voice of the UK’s small businesses and the self-employed. Established over 40 years ago to help its members succeed in business, FSB is a non-profit making and non-party political organisation that’s led by its members, for its members. As the UK’s leading business campaigner, FSB is focused on delivering change which supports smaller businesses to grow and succeed. FSB offers members a wide range of vital business services, including access to finance, business banking, legal advice and support along with a powerful voice in Government. Each year FSB also runs the UK’s Celebrating Small Business Awards. More information is available at www.fsb.org.uk. Yo u can follow us on twitter @fsb_policy and on Instagram @fsb_uk.