We will use your email address only for sending you newsletters. Please see our Privacy Notice for details of your data protection rights.
Cash access has become a problem for people during the pandemic as businesses moved to a digital payment only model and banks closed a number of cash machines and branches. This is expected to impact pensioners and the elderly the most but the FCA has stepped in to ensure that cash access is protected where possible.
The FCA will now be able to monitor whether customers are treated fairly before a final decision is made from firms.
The regulator will now force companies to communicate their closure intentions with customers carefully before any changes are made.
These notices must come at least 12 weeks before any proposals are implemented which should give customers time to take action, such as changing banking provider.
Sheldon Mills, the Interim Executive Director of Strategy and Competition, commented on the changes: “Although closures or conversions are decisions for firms to take, it is important they implement these decisions in ways that are fair to their customers.
“Even during the pandemic, cash remains essential to many consumers.
“The publication of this guidance sets out clearly our expectations on firms and will ensure that firms make it a priority that customers are treated fairly, especially those who are most vulnerable.”
Despite these efforts, some people feel that a move to a completely digital financial system is inevitable.
Chris Vinnicombe, a VP for Financial Services at Acxiom, commented on this dynamic: “Physical shops might now be back open, but online outlets have remained available throughout, and consumers have become very comfortable with ordering and purchasing online, and using their card details to do so.
Rishi Sunak reveals new coronavirus support plans – full details [INSIGHT]
Martin Lewis provides warning on digital banking firms [WARNING]
Negative interest rates: Accounts ‘could go down this path’ [EXPERT]
“This is increasingly being facilitated through apps and contactless technology – more than half of the population had used contactless cards at the start of April, according to a survey from MasterCard.
“Since then, this trend has only accelerated, with Acxiom research in May putting that figure at 70 percent. In the UK it is now ubiquitous at 93 percent.
“Many of us no longer regularly carry cash around, so it’s no surprise to see such high usage of contactless payments for face-to-face transactions.
“This trend was already well underway before Covid-19, but the added concerns from businesses and customers will only accelerate the push to reduce the amount of contact points through things like cash.”
How is Boris Johnson handling the coronavirus crisis? Vote in our poll
Chris went on to analyse what the difficulties would be in moving to a cashless society and who within the UK population would struggle the most.
As he concluded: “The challenge in moving towards a completely cashless society is that a significant proportion in society is still ‘unbanked’.
“Without a bank account, the push towards card payments is difficult.
“Some also have concerns about the data generated from cashless payments, and how that is used.
“Retailers and card providers need to be transparent about how they’re using the payment history and information of their customers and be clear about how customers are benefiting. “Like all data-enabled consumer innovations, transparency and simplicity will be as important as security in ensuring people, regulators and observers such as the media, understand the benefits and that data is enabling them.”
The new guidance from the FCA came into force on September 21.
The FCA has also committed to working with the Payment Systems Regulator (PSR) as part of its wider work to ensure an appropriate and sustainable model of maintaining access to cash.
Source: Read Full Article