MEASURES piloted in Scotland to protect access to cash are "insufficient' with nearly half saying they are unlikely to use a cashback without purchase scheme.

The scheme being rolled out to shops across Scotland in a bid to retain the public's right to access hard cash, was found by many to as inconvenient and even a security risk, according to new research.

Scotland has been at the centre of the initiative to provide free cash withdrawals in shops without a purchase.

It comes after the government made changes to the law last year to allow people to request cashback from their local store without needing to make a purchase or pay a fee.

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But a new survey has found that just one in six (16%) are even ware of the scheme, four months after its launch.

The survey of more than 2,000 people found that of those just under a third (31%) have used it to access cash.

Nearly half (46%) of those questioned said they are unlikely to use the service, with a quarter (25%) of these thinking it will not be convenient.

Nearly a fifth (17%) who are unlikely to use the scheme have concerns about privacy and 16% are worried about security issues.

A quarter (25%) of people who said they are unlikely to use the service said it would feel unfair to the shop or business to handle the cashback service.

The Herald:

The consumer organisation Which? said is believes that cashback without purchase is a valuable tool in helping to protect access to cash, but it cannot meet everyone’s needs and should only be viewed as "part of a range of solutions".

A successful Community Access to Cash trial in four areas of the UK including Cambuslang in South Lanarkshire (Scotland) and Denny in Stirlingshire has resulted in nationwide roll-out of the scheme.

October, 2020, marked the start of the million pound pilot initiative which allowed consumers to withdraw cash from PayPoint terminals in shops without paying a fee.

Consumers using the service can choose to withdraw any amount between 1p and £50 rather than being restricted to notes dispensed by ATMs.

Cashback without a purchase was one solution proposed to preserve communities’ access to cash, with campaigners and the government also mulling shared banking hubs, cashback ordering systems and strengthening the Post Office’s banking facilities.

Analysis produced exclusively for the Herald by the consumer organisation Which? revealed that nearly half (47%) of the over 1000 bank branches which were open in Scotland six years ago will have shut by last year.

At the end of last year, Edinburgh-based TSB announced plans to axe 70 more of its branches putting 150 jobs at risk.

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TSB will effectively be shutting a quarter of its network – in a move described by campaigners as “yet another hammer blow” to the UK high street.

And data provided by LINK, the UK's main cash machine network, revealed that the number of ATMs dropped from 5,866 in November, 2019, to 5,239 in September 2020. There were 4022 free-to-use cash machines across Scotland while 1,217 charge - meaning that in one in four of the nation's ATMs you have to pay to get your money out.

Richard Piggin, Which? head of external affairs and campaigns, who was raising concerns with MPs on the Scottish Affairs Committee yesterday said the pandemic had accelerated a transitional payments but that 8m British consumers still use cash as a fundamental payment methdo and it was crucial not to "leave anyone behind".

"As good as the alternatives are, we don't have sufficient uptake, he said. "There are still barriers to some consumers taking up digital alternatives that we need to overcome and we are nowhere near that position.

"The sheer number of bank branch and ATM closures across Scotland in recent years has left many people and communities that rely on cash and face-to-face banking services at risk of being cut adrift.

The Herald:

“While recent proposals put forward by the banking industry are promising, voluntary solutions alone cannot provide the certainty that consumers' need to access cash will be met.

"The government committed to legislate to protect access to cash almost two years ago, and it must now bring this forward as a priority, to ensure that consumers who rely on cash can continue to access it for as long as it is needed."

Recent research from the FCA found that, during the pandemic, 15% of UK adults have struggled to cope without access to bank branches and ATMs, while 16% suffered as more businesses stopped or encouraged customers to use contactless or digital payments.

FCA research suggests that five million people remain dependent on cash.

In January, last year research showed that over 2m Scots have been refused payment with notes and coins during the pandemic, threatening the viability of the cash network.

A spokesperson for the trade association UK Finance said: “The banking and finance industry has publicly committed to ensuring there is continued access to cash for those who need it, when they need it."

In December, the Access to Cash Action Group (CAG), chaired by Natalie Ceeney, set out plans on how the industry will deliver on access to cahs commitments through a range of solutions, including shared bank hubs and free ATMs, alongside cashback without purchase.

Ms Ceeney said: “Cashback at the till is the latest innovation to help protect cash access and I was delighted that it was included in the Financial Services Bill last year.

“When we trialled it as part of the Community Access to Cash Pilots, we were really pleased by the outcomes and the feedback of people using it.

“Unlike cash machines, you don’t have to withdraw rounded amounts and our experience shows that many people using it live on tight budgets and, for example, may not have £10 in their account to withdraw from an ATM.

“I recognise that some people prefer visiting cash machines or their local bank or Post Office, but in some locations, where the village shop is the centre of the community, there is trust between the shop owner and customer – that’s where cashback at the till did come into its own.

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“It’s still very new and it’s beginning to roll out across the country, but I agree that long term we do require legislation from the Government to protect access to cash.”

John Howells, chief executive of Link said: “While it is still early days for cash-at-the-till without purchase, and there are still the effects of Covid-19 to contend with, consumers’ usage continues to grow very strongly and last week there were almost 10,000 withdrawals (averaging £23), a week-on-week increase of 23%.

“The service is also proving very popular with small retailers who appreciate the fee that they get paid when they choose to offer the service.”