In a recent interview, Charles Evans, Sales Director for NoteMachine, shared his thoughts on why access to cash is such an important issue for NoteMachine and Axis.
What is affecting access to cash in the UK?
Bank branch closures in the UK continue at an alarming rate. According to recent Government data, the number of UK bank and building society branches has fallen by 40% in the last decade. There were 430 closures in 2022, and more are expected this year.
There is a lot of press and media debate around giving access to cash, particularly to the older population and populations in more rural areas. However, it’s not just about rural areas, it’s also in inner cities with a large density of people in lower demographic groups. Yet the media often conveniently ignores this huge tranche of society, where customers suddenly have their access to cash restricted because of the movement of ATMs from free to pay to use, and the closure of bank branches.
What the data tells us about the need for cash
A large proportion of the economy still relies on cash. When you’re on a lower income, cash in your pocket is often the best way to budget, sometimes on a daily, if not weekly basis. When you look at the proportion of cash withdrawals to balance enquiries, six to seven people ask for a balance enquiry for every 10 cash withdrawals. They are visiting ATM cash machines to ascertain how much money they have available, using it as a budgeting method.
In addition, many small to medium-sized businesses rely on cash because the cost of taking digital payment is expensive: an electronic payment might cost £0.50, and that adds up. That’s why some retailers ask for a minimum spend with card transactions, whereas taking cash is free.
As soon as you go down the fully digital route, you’re at the hands of a few card-issuing businesses who control what you buy, how you buy it and how much they choose to charge you for it. With debit/faster payment, Visa or Mastercard (who both charge fees to the retailer), once you are on a digital platform, there is an argument to say that with smart technology, they can potentially start to control what you spend your money on.
It’s undeniable that the use of cash is naturally on the decline, and it will eventually find a comfortable level against digital methods of payment. Cash will decline through market forces: as consumers use less cash, there will be fewer ATM facilities available to them. But just like the promise of a paperless office, the death of cash is overstated.
How Axis gives choice back to customers
Access to cash is all about choice – consumers and businesses want the option to choose how they manage their costs and cash flow. NoteMachine is in the market to provide that level of choice to consumers in the UK, both with their substantial ATM network (one in five UK ATMs is owned and managed by NoteMachine) and with Axis, our new drop-down, ‘plug-and-play’ fully functional banking facility that can be located almost anywhere.
What Axis delivers at a singular bank level is the ability to gain reach for existing customers and potentially future customers, allowing banks to still cost-effectively market their brand and their services, whilst being located in places for maximum footfall.
NoteMachine is offering the opportunity and infrastructure to do something new, paving the way to provide a multi-deposit functionality service. This is a completely different landscape compared to what banks have had historically, with branches in high street locations.
Axis hubs will offer multi-deposit points in more rural areas and cold spots, which can be used by as many as 10 banks, in places like supermarkets, car parks and petrol stations. That will run in parallel with individual Axis branches as banks focus on supporting the digital strategy and reaching out to their customer base. As digital becomes the only route, the multi-bank facility solution will most likely be the norm in five to 10 years.
In the meantime, there should be a symbiotic relationship between access to cash and digital payments, whether that be Apple Pay, Chip and Pin or contactless.
Become an early adopter
Early bank adopters recognise that NoteMachine and Axis offer an attractive and viable alternative to traditional bricks and mortar banks found predominantly in high street locations. Consumers are now in shopping malls and retail parks, where there is a high flow of customers or considerable footfall.
Access to cash and the decline of banking facilities will become a bigger debate in 2023. NoteMachine offers a long-term solution to access to cash and will enable financial inclusion – for everyone – whilst creating a commercially sustainable operating environment for financial institutions.
NoteMachine is a partner of choice to Government and industry for the future of cash infrastructure.
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