Under the FCA’s proposals, designated banks and building societies will need to assess gaps in access to cash. These assessments need to take into account local factors such as demographics and transport. Where firms identify gaps, they will need to act to address these needs under a strict timetable.

While the business lobby group supports these proposals, it believes they do not go far enough in maintaining small firms’ freedom to choose cash as a form of payment, which it sees as inseparable from the broader cash services ecosystem.

For example, FSB believes that the proposals do not adequately address the ongoing decline in cash access infrastructure, with bank branch closures continuing at an alarming rate, and a shrinking and increasingly fragile free-to-use ATM network.

The consultation also overlooks essential services such as local cash deposit facilities for small business owners, says the industry body, and assisted cash services that offer personal interaction.

To strengthen the FCA’s proposals, FSB is calling on the watchdog to broaden its focus beyond ATMs to include comprehensive support for cash deposit services and face-to-face assistance and wider roll out of shared banking hubs. It points that cashpoint operator Link has identified the need for over a hundred hubs, but only 33 have been opened opened so far.

The FSB also believes that banks must be held to higher standards when considering the impact of their closures on access to cash.

Martin McTague, FSB’s national chair, says: “A small business must be free to choose which payment options it wishes to accept, including cash. To enable this, it’s vital for the infrastructure required for cash to remain available in all areas.

“Cash access is too important to be left to innumerable individual commercial decisions which, taken together, represent a significant threat to people and businesses’ ability to withdraw, process and deposit cash.

“We’re concerned that the FCA’s proposals won’t be enough to pause the trend seen in recent years towards fewer free cashpoints and bank branches.”