DEB3MA A female senior citizen inserting a card into a ATM
Consumer group said bank and ATM closures and rise of online payments meant many communities were 'struggling to access the cash they rely on' © Susan Norwood/Alamy

The consumer rights watchdog Which? has called for the appointment of a new regulator to protect the interests of millions of people who still use cash in an increasingly cashless society.

According to new data from the consumer group, cashpoint machines in the UK disappeared at a rate of almost 500 a month in the second half of 2018 — more than half of them free-to-use machines — as UK businesses and consumers move to digital payments. This has led to fears of “ATM deserts” being created in areas outside the UK’s large cities.

Cash machine operators have also warned that controversial planned reductions in the fees they receive from card issuers will make thousands of cash points uneconomical to run.

Which? said action was needed to help the 25m Britons for whom notes and coins were “still a necessity” and said customers were being hit with a “double blow of cashpoint and bank closures”. The effect, it added, was to leave many communities “struggling to access the cash they rely on”.

The organisation said a regulator should be appointed with the sole responsibility for the UK’s cash infrastructure in order to protect consumers and businesses and to ensure everyone had a back-up to digital payments.

In addition to the loss of cash machines, the UK has lost two-thirds of its bank branch network in the past 30 years, according to parliamentary records. As a result, one-fifth of households are now located more than 3km from their nearest bank.

At the same time, almost three-quarters of the population still use cash frequently, according to a Which? survey of 2,000 adults last year. More than half of those surveyed said they had recently found themselves in a situation with no alternative but to pay in cash.

Last year the Ceeney Report, an independent review, found the move to digital payments could be a “serious problem” for as many as one in five people. The report, led by Natalie Ceeney, a former chief executive of the Financial Ombudsman Service, said certain groups such as the old and disabled and those in rural areas were particularly vulnerable to a move away from cash.

Which? also highlighted the series of technological glitches at banks such as TSB — when thousands of TSB customers were locked out of their online accounts last year after a bungled IT migration — that illustrated the dangers for customers reliant on digital banking.

Jenni Allen, managing director of Which? Money, said: “Cash is . . . a vital back-up as fallible digital payments grow in popularity, so the government must appoint a regulator to oversee these changes and ensure no one is excluded and left struggling to go about their daily lives.”

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