SCOTLAND'S use of cash machines has slumped by over a third during the coronavirus crisis leading to new concerns about the future of money.
New analysis has revealed that Scots were withdrawing £76m less in 2020 than the year before, and seen the biggest 'per adult' drop in the amount of cash taken from ATMs believed to be linked to tougher Covid-19 restrictions.
While the average Scot took out £1838 in cash in 2020, that is almost £900 less than in 2019, according to details provided by LINK, which oversees the UK's largest cash machine network.
It came as it emerged that Co-op and Morrisons were investigating an IT glitch that created problems for contactless card payments in stores with some customers warning of double payments.
It has led to concerns that as fewer people use ATMs, they become less profitable and at risk of either closure or becoming charging machines.
READ MORE: The end of cash? Two million Scots struggle to pay with coins and notes during pandemic
Last week the Herald revealed that over 2m Scots have been refused payment with notes and coins during the pandemic, threatening the viability of the cash network.
A study by the consumer organisation Which? warned of a cash network in danger of crumbling saying that 30 per cent of Scots reported being unable to pay with cash at least once when trying to buy something since March, when coronavirus restrictions were first introduced.
Former financial ombudsman Natalie Ceeney, author of the Access to Cash review, said the government needs to legislate to protect cash now.
Despite lockdown some £142m a week was being withdrawn from Scottish cash machines in 2020 - although that is a £76m drop on 2019.
Across the UK the new report found adults visited ATMs 12 times less in 2020 than they did in 2019.
Ms Ceeney said: "We know people are using less cash, but the level of cash being used through the pandemic may surprise people who have moved entirely to digital or card payments. There are still millions of people for who digital payments don’t yet work.
"Cash is still a core part of our national resilience. What happens if payment systems go down and the nearest ATM is a few miles away? We are seeing ATMs and bank branches close, as our infrastructure collapses, before we’ve answered these critical questions .
"We need government to legislate to protect cash now - to keep their promise - before it's too late. Once the cash infrastructure has gone, it will be impossible to put back.’ According to the Which analysis, despite the lockdown affecting use of cash machines, around one in 25 across in Scotland said they were still relying on cash, which would equate 220,000. Some 14 per cent, equivalent to over 760,000 in Scotland, also said they would struggle without it.
And around 40 per cent, representing 2.2m in Scotland, said that they still viewed cash as an essential backup during the pandemic.
Data shows that more than one in ten of Scotland's network of cash machines have been shut down at a rate of over two a day as the number of cash withdrawals has plummeted during the pandemic.
READ MORE: Scots pay £10m in a year for the privilege of access to their cash
More than 600 have been shut between November 2019 and September last year, with hundreds more believed to have been temporarily shut because they are located in premises that were closed due to Covid restrictions.
Analysis produced exclusively for the Herald by the consumer organisation Which? in October revealed that nearly half (47%) of the over 1000 bank branches which were open in Scotland five years ago will have shut by next year.
John Howells, LINK chief executive said: “The coronavirus has changed our relationship with cash. More people are now confident and happy to shop online or use contactless payments. Our research shows 75% say they will use less cash going forward.
“However, the sharp decline in ATM use brings significant problems. Cash machines are by far the most popular way of accessing cash, yet a 37% year-on-year drop in transactions places enormous strain on the cash infrastructure. As our data shows, despite the rapid decline in cash, millions of people still rely on it and aren’t ready or able to go digital. The good news is that the Government has said it will be bringing forward legislation to protect access to cash, but this is needed urgently.”
Christine Jardine, Liberal Democrats' treasury spokesman has called for the government to act quickly to ensure that communities across the UK have access to cash.
It came as group of 37 cross-party MPs wrote to the government to draw attention to the role the cut in the interchange fee, introduced in 2018, has played in the access to cash crisis disproportionately affecting the most vulnerable in society.
They point out that banks have saved £200 million in the two years since interchange rates were changed.
The letter derides the Link ATM network's guarantee that communities facing cash shortages will have their fee-free cash machines replaced by a member bank.
Ms Jardine wants to see the Payments System Regulator introduce a tiered or zonal approach to what is termed interchange fees to ensure funding is fairly distributed throughout the UK.
She said: “At a time when banks are closing branches across the country we need to ensure that people can still have free access to their own cash."
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