Revealed: Two cash machines axed every day in Scotland as Covid causes slump in withdrawals

It has prompted new concerns about the nation "sleepwalking" into a cash-free society leaving millions who rely on cash disadvantaged.

It comes two weeks after 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 five years ago will have shut by next year.

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Earlier this week, the Post Office said it was to cut a third of its cash machines in the next 18 months with 600 ATMs to be shut by March 2022.

Data provided to the Herald through LINK, the UK's main cash machine network, has revealed that the number of ATMs has dropped from 5,866 in November, last year, to 5,239 in September. There are now 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.

It comes as LINK has how revealed that ATM withdrawals between April and September fell by 52% compared to the same time last year - with the Glasgow Central constituency seeing the biggest drop in Scotland at 70.5%.

Separate research has revealed that thousands across the country have been prevented from paying with cash in stores in recent months as the coronavirus pandemic further threatens the viability of the cash system.

Nearly 2,500 people responded to the consumer organisation Which's cash acceptance tool, launched in mid-September, which asked people to report their payment problems. The "alarming" results suggest what it called a "concerning" problem with cash acceptance across the UK.

Of the reports that Which? received, four in 10 (38%) related to a problem when paying for food or groceries, one in seven (14%) were linked to leisure activities, such as going to a coffee shop or restaurant, and one in 10 (11%) were for parking.

Two in five (43%) who reported being unable to pay with cash said that they did not have another payment method at the point of purchase Which? is calling on the financial regulator to take urgent steps to establish the full scale of the issue and ensure that cash remains a viable payment option for those who need it.

Age Scotland said the surge of bank closures and the removal of ATMs will make managing money and accesssing cash increasingly difficult for hundreds of thousands of older people, particularly those on low or fixed incomes and in rural areas.

Adam Stachura, the charity's head of policy said: “There is no doubt that cash use plummeted during months of lockdown earlier in the year and the huge reduction in economic activity we saw as a result, but long-term decisions should not be made on the back of short-term trends. While cash-free transactions are becoming more common, they are by no means an option for everyone.

"Forcing older and more vulnerable people into a cashless society would see many left behind and financially excluded. Urgent steps must be taken to protect access to cash and we support calls for the FCA to have a hand in this going forward."

"We know that a quarter of all ATMs are pay to use, and it’s unacceptable that an increasing number of people now have no choice but to pay to access their own money."

According to LINK, between April and September, Scots consumers took out £2.5bn less than they did in the same period of 2019.

Below Glasgow Central, the biggest drops in cash machine use came in Orkney and Shetland (-70.2%), Edinburgh East (-66.5%), Edinburgh North and Leith (-66.4%) and Na h-Eileanan an Iar (-65.3%).

Some of Scotland's most deprived areas showed the greatest desire to continue to use cash during lockdown with Glasgow North East, showing the narrowest falls in ATM withdrawals, dropping by 34.2%.

a 44% drop in ATM withdrawals. That was followed by Airdrie and Shotts (-36%), Glasgow East (-37.7%) and Rutherglen, Hamilton West (-38.3%) and Coatbridge, Chryston and Bellshill (-41.6%).

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While ATMs were visited much less often, people took out more money. The average transaction value increased from £68 in February to as much as £86 in May. In September, consumers were still taking out more, taking out an average of £78.

LINK said that in the early stages of the pandemic, around 600 ATMs were temporarily unavailable across Scotland because they were located in shops, airports, garden centres and pubs that had to close.

By the end of September around 50% of these had reopened.

LINK's head of financial inclusion, Nick Quin: “It is interesting to see stark differences in cash withdrawals across the country, most notably within Glasgow, but even from one town to the next.

“Some of this down to the fact that people aren’t visiting busy city centres or that the local ATM may have temporarily closed. More importantly, we can see that some communities are far more reliant on cash and quite often cards and digital payments don’t work for everyone.

“We’re delighted to see that the UK Government recently launched a consultation to protect access to cash. Covid-19 has changed payment habits, possibly forever, but cash still remains important and it’s vital we protect it.”

Recent research conducted by LINK shows that while 70% of people say they are using less cash because of Covid-19, just over two-thirds (68%) said they have used cash in the past two weeks.

And some 29% of people said that they have experienced situations, during the crisis, where they would prefer to use cash, but instead used a card because the place they were in discouraged cash payments.

Citizens Advice Scotland said helping people access cash is "vital" as many families rely on it as a means to control, budget and monitor their spending.

CAS financial health spokeswoman Sarah-Jayne Dunn said: “Put simply, the need for cash has not gone away and we know from our own data that those on lower incomes are at a greater risk of financial vulnerability and exclusion, yet this group has a higher likelihood to prefer cash over card and online payments.

“We must do everything we can to ensure we do not become a cashless society as this will exclude many people who rely on physical money. We would urge the Government to work with retailers and businesses on developing ways to ensure people are not cut off from such a vital lifeline.”

The Access to Cash Review revealed eight million people were at risk in the UK from the demise of cash.

Gareth Shaw, head of money at Which?, said: "After years of dramatic cuts to cash machine and bank branch networks, our research highlights how coronavirus is accelerating the decline of cash and causing real problems for many people in Scotland and across the UK who need it to pay for everyday essentials.

"Which? strongly supports government proposals for the financial regulator to take responsibility for protecting cash - but the FCA must also start closely monitoring cash acceptance and publicly track acceptance levels by businesses, or risk irreparable damage to our already fragile cash infrastructure."