SCOTLAND is at the centre of a new initiative to provide free cash withdrawals in shops without a purchase as part of new plans to improve access to cash across the UK.

Next month marks the start of a new million pound pilot initiative which will allow consumers to withdraw cash from PayPoint terminals in shops without paying a fee.

Starting in October 2020 and forming part of the Community Access to Cash Pilots, the trial will initially be piloted in 15 shops across Cambuslang, Lanarkshire; Denny Burslem in Staffordshire and Hay-on-Wye in Breconshire.

If successful and if supported with an appropriate regulatory framework, LINK could roll-out this service to allow thousands of shops to provide free access to cash to local communities without the need for an ATM.

Retailers will be paid for providing the service by PayPoint and consumers using the service will be able to ask for coins as well as notes from the retailer via a paypoint terminal rather than be restricted to the denominations of notes dispensed by ATMs.

It comes as the Herald revealed how ATMs have been vanishing from Scotland’s high streets - sparking demands for better access to cash.

READ MORE: The South Lanarkshire town that was left with no banks

The nation lost 158 free-to-use cash machines in the space of just one month at the end of 2019 with 120 of them charging customers for the right to withdraw their money.

At the end of 2019 there were 4437 free-to-use ATMs in Scotland – a loss of nearly 1000 in two years. Meanwhile there were 1420 charging ATMs – a rise of nearly 500 over two years.

Cambuslang will also be home to one of three new 'banking hubs' which will be run by the Post Office and will be based in an empty retail outlet.


The hubs will be for banking services only, including paying in and withdrawing money and any major UK bank customer will be able to use it.

It came after feedback from locals in Cambuslang found that the existing post office was difficult to do transactional banking services because people were queuing and using wider services such as posting a parcel.

Cambuslang will also be part of a trial where community groups such as Citizens Advice will be able to provide support on issues such as mortgage and debt advice.

In Denny there are also plans to refurbish a post office to better meet community banking needs. Proposals also involve operating a "financial hub service" in a within a local supermarket which will include business deposit facilities.

There are also plans to operate a "financial hub service" in a within a local supermarket which will include business deposit facilities.

Natalie Ceeney, author of the Access to Cash Review, who chairs the Community Access to Cash Pilot said: “Cash remains critically important to both individuals and communities across the UK. The rapid switch to digital is threatening the viability of today’s cash infrastructure.

"This can lead to consumers left without cash access or forced to leave their own village or town to get cash elsewhere, often at significant inconvenience and cost. In turn, local retailers lose custom, as consumers spend their case elsewhere, and then struggle to bank their cash takings without shutting up shop to drive to a bank branch some miles away, losing revenue and frustrating customers. It’s critical that we find ways to protect the viability of cash, for consumers and communities alike."

“These pilots are designed to find sustainable ways to keep cash viable locally, which, if successful, can then be rolled out more widely. The government has already committed to legislate to protect cash, and the financial services regulators are working closely with banks to identify practical next steps. Our aim is to use the pilots to critically inform this work.

“Although the pilots haven’t yet started offering services, the work we’ve done with local communities has shown us in some detail what is needed. One key lesson is that, as we’ve seen elsewhere, formulaic algorithms rarely work. We’ve relied too much on saying ‘town X is ok because it has an ATM’ or ‘that group of people can get to a bank branch within three miles’.

"But what if that ATM is in an unsafe part of town? Or if it’s often out of order? Or if the local retailers can’t bank the cash they collect without closing their doors? Or there isn’t a bus route to the town with the bank branch? Then the ‘answer’ doesn’t work.

“These pilots will use innovative technology to help people access and deposit cash. The pilots will also work with key existing service providers to explore how they can support the cash infrastructure, whether through creating local drop in spaces for community banking, retailers offering cashback and post offices enhancing their services. The commitment of the major banks, the Post Office, LINK and key consumer groups to all work together on this initiative gives us confidence that we can create solutions which keep cash viable in a sustainable way.”

Cambuslang, the Lanarkshire town of 25,000 people, found itself at the forefront of the fight for better access to cash two years ago.

It went from having three bank branches to having none in the space of 18 months from 2016. At the same time the number of cash machines dropped from four to two.

The pilot organisers say that since 2018 the town has become "unbanked" with some parts of the area ##in the bottom 20% of the Scottish Index of Multiple Deprivation.

READ MORE: MP bids to have 'rip off' cash machine charges outlawed

Supported by Cambuslang Community Council, the new pilot will set up a ‘financial hub’ supported by the Post Office aimed at consumers and business customers. It will include a 'drop and go' deposit facility for business users.

Lewis Alcraft, chief operating officer of PayPoint said: “We’re delighted to be part of the pilot scheme as we look to protect access to cash for the millions of consumers that continue to rely on it. Additionally, this scheme will bring even greater value and footfall to the participating PayPoint retailers.” John Howells, chief executive of LINK added: “This is a first in the UK and could prove to be an important measure for keeping cash viable. Assuming consumers agree this is a useful new channel, it will be important that government and regulators create an effective regulatory framework to enable a full rollout.”

Nick Read, chief executive of the Post Office, said: “Our branches provide critical cash deposit and withdrawals services for millions of personal and business customers every week.

"We will use these pilots to trial new designs in selected branches; and introduce automated cash deposit facilities for business and personal customers who may have previously used this service at a bank branch. Everyone should have the right to use cash and be able to easily and securely access it wherever is most convenient to them.

"We are pleased to be playing a key role in these pilots and our Postmasters who are taking part will be in a position to share important insights that will make a real difference as to how we continue to best meet peoples’ cash needs in future.”

John Glen MP, economic secretary to the Treasury and City minister added: “Cash remains important to the daily lives of millions of people across the UK, and protecting access to it is a key Government priority. I welcome the Community Access to Cash Pilot Initiative, which will test innovative new approaches to support access to cash in local communities that can be extended across the UK. Thank you to Natalie Ceeney and all industry participants for their important work to ensure we support consumers and businesses who continue to need to use cash.”