Are we really headed for a cashless rural society?

How we pay for goods and services, and how we access cash are changing rapidly with rural consequences, finds Brian Wilson.

The continuing closure of bank branches, along with recent evidence about the loss of cash machines (ATMs), is building into a significant news story about access to cash.  It is one that has implications both for households and businesses, and one that has a significant rural dimension.

Consumer champion, Which, reported in September that 757 bank branches have either closed down already or are planned to close down during 2018.  By far the largest closure programmes this year are (in order) those by Royal Bank of Scotland, Nat West and Lloyds.

This means that 2,961 bank branches will have closed down over the last four years, at an average rate of 60 per month.  As previously reported by Rural England in its State of Rural Services 2016 report, a significant number of these closures have been the last branch in rural and coastal settlements.

Meanwhile, ATM network coordinator, LINK, reported last month that the number of free-to-use cash machines is now shrinking at a record rate.  Around 250 cash machines are disappearing each month, as banks and other operators remove those they deem uncommercial.

LINK has previously named 2,365 free-to-use machines in rural and remote locations that it wishes to see remain in operation.  These are machines which have no free alternative within a distance of one kilometre.

Despite this aim, 76 of these remote machines were removed between January and July of 2018 and 21 do not even have a nearby post office from which people can withdraw cash over the counter.

If this loss of ATMs was restricted to city centres and high streets that have ample provision – and many of the closures are in such places – it would probably not be an issue.  But when it affects the most rural places, it clearly is an issue.

ATM provision appears buffeted by various forces.  They include shrinking patronage, as people turn to other means such as contactless payments.  They also include banks cutting their operating costs by paying less for ATM use.  That payment had been set at 25p per transaction, but was due to drop in stages to 20p over four years.  A small ray of light is that the third such reduction has been cancelled and the final one due in 2019 is under review.

Which brings us neatly to the latest annual results (for 2017/18) posted by Post Office Limited.  It reported that cash withdrawals through its network have grown by 6% since the previous year and now stand at an annual total of 125 million withdrawals.

Even more noticeable was a 28% annual increase in the number of cash deposits made by small businesses at post offices.  This rapid growth follows the welcome agreement reached in January 2017 between Post Office Limited and the banking industry, which enables 99% of personal account customers and 75% of business account customers to carry out their regular banking transactions (of withdrawals and deposits) at a post office.

Given the still-substantial reach of the post office network into rural communities it would be interesting to know just how much of that growth took place through its rural outlets.

Meanwhile, the big picture has been set out in the 2018 report on UK Payment Markets, produced by industry analysts, UK Finance.  They have tracked the declining number of cash payments.  Whilst cash still accounts for roughly a third of all payments made by UK consumers, the latest 34% share figure should be compared with 61% a decade ago.

Moreover, in 2017 cash was overtaken by debit card as the most common method of transaction payment.  This primarily reflects the growth of contactless payments.

UK Finance predicts that these trends will continue and within ten years cash payment will account for just 16% of all payments.

Prediction is a tricky game.  However, small rural retailers and even those such as market stall holders may need to change with the times, where they have not already done so.  We may not be ready yet or anytime soon for a cashless rural society, but that doesn’t mean you can easily buck a trend.

This article was written by Brian Wilson whose consultancy, Brian Wilson Associates, offers policy research and support.  Contact is at  Areas of specialism include rural policy and proofing, local economic strategies, community action, service delivery and neighbourhood planning.  He is a Director of Rural England CIC.  He is currently a Specialist Adviser to the House of Lords Select Committee on the rural economy.


Which? report on bank closures:

LINK figures for ATM losses:

RE State of Rural Services 2016 report:


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