Small firms hit hardest by cash point removal
The removal of cash points across the UK is hitting small businesses the hardest, according to the Federation of Small Businesses.
It comes as LINK reported that free‐to‐use cash points have shut at a rate of more than 250 a month between the end of January and July 2018.
The rising prevalence of contactless payments is partly behind a 2% decline in cash machine numbers, dropping by 1,300 in that period. Pay‐to‐use cash machine numbers also fell by 11%.
Mike Cherry, chair of the Federation of Small Businesses, described access to cash points as being “vital” for small firms, and especially those in hard‐to‐reach or rural areas.
The loss of this crucial access can leave small firms without a financial resource, and despite LINK reporting that cash points would not close if the next nearest ATM is more than 1km away, 76 were still closed in the first six months of 2018.
LINK has commitment to protect geographical areas, as the provider has increased the subsidy it pays to operators in order to keep cash machines open.
The FSB has also warned that the move, coupled with widespread bank branch closures, is having a detrimental impact on the ability of small firms to do business.
They warn that card payment companies are taking advantage as they have “free reign” to impose greater charges on small companies.
The FSB report that six in ten retailers view cashpoints as being integral to their operations and called on the Payment Systems Regulator to take action.
For firms operating on tight budgets, not being able to access finance can place pressure on their operations, especially if it means they struggle to meet their liabilities.
This can help to reduce the risk of potential insolvency by providing short‐ or long‐term funding solutions that suit the business in question.
By Phil Smith