Although the Government has belatedly attempted to protect cash as the preferred payment method, the move towards a cashless society continues apace.
A few days ago, Jim Storey contacted me and eloquently detailed the obstacles his local Lions Club faces to ensure it can continue to accept cash payments and donations from those who support its various fundraising events.
At every twist and turn, he looks frustrated. And by being forced to only accept contactless payments, this is eating up the money he uses to help good causes.
Money matters: Fleet Lions Club has reluctantly had to make its events cashless
Jim, 69, is a member of the Fleet Lions Club in Hampshire. Through organizing a series of events around the city, the 50-member club raises around £50,000 a year. His next big event is a fireworks show, the Fleet Lions Firework Fiesta, on the fourth of next month.
“It’s going to be crazy,” says Jim, who retired from the Environment Agency four years ago. ‘We will have illuminated toys on sale for children and will launch £5,000 worth of fireworks into the night sky. It’s a night when the community comes together.’
However, it won’t be all the financial success it could be.
As a result of the closure of the city’s HSBC branch (the bank Fleet Lions uses), the club has had no choice but to rethink the way it organizes its events.
When it was still open, money raised for a big event like Guy Fawkes Night could be quickly deposited into the branch’s night safe. But now that option is denied, it means depositing the cash at the HSBC branch in Farnborough.
Well, since it’s not a million miles away, however, a recent change to HSBC’s Lions account classification means any cash deposits or withdrawals incur a 1.5 per cent fee .
As a result, the Fleet Lions Club has reluctantly had to make its events cashless. Thus, for its fireworks night, tickets can only be purchased mainly online in advance, at a cost, or by contactless card in the town on the three Saturdays before the party.
Additionally, the event is cashless (a £2,000 donation from the bank would cost £30), meaning anyone wanting to buy mulled wine (Lions Gluhwein) or anything from the barbecue must pay with a contactless card.
“What’s surprising,” says Jim, “is that the payment machines and online ticketing system we use charge based on a percentage of revenue.” So for our recent Beer Festival in August, we made a profit of £8,000 instead of £9,000. Of course, that means less money going to good local causes.”
After spending time over the summer in both northern Spain and France (where bank branches are proliferating rather than shrinking), Jim asks a good question.
“If bank branches can thrive in these two close neighbours, why are they disappearing in the UK?” Why indeed.
Responses on a postcard sent to: 9 Derry Street, London W8 5HY. Or email jeff. email@example.com.
- Details about the Fleet Lions fireworks festival can be obtained by visiting: Fleetlions.org.uk.
Crisis or not, Metro continues to stand out
As some colleagues like to remind me, I have been a long-time supporter of Metro Bank. I enthusiastically welcomed its launch 13 years ago – the UK’s first new bank in over 100 years.
Today, its continued emphasis on customer service excellence still sets it apart from the madding crowd of banking (with the possible exception of building society Nationwide).
Unlike most of its rivals, Metro welcomes customers when they enter a branch: it doesn’t immediately usher them away from the counter, direct them to an ATM or cash deposit (check) machine, or tell them to connect online.
Cheeky: Metro Bank founder Vernon Hill with his terrier Duffy
I know this because I have a checking and savings account with them and occasionally visit their branch (one of 76) on Kensington High Street in London to deposit a check my mother sent me.
They always greet me with a smile. Their online service, which I use to make transfers between accounts, is also nifty.
However, Metro 2023 is a different animal than 2010.
Thirteen years ago, it started with a relatively clean slate, although American founder Vernon Hill did have a history in the United States for criticizing banking regulators in the wrong way.
Hill was bold, he knew how to sell the Metro brand (free pens, free cash conversion machines) and he talked with words. He was also a networking expert. I remember one night having dinner with him, his wife Shirley, Duffy the dog (yes, a canine) and future chancellor Kwasi Kwarteng long before anyone other than his constituents knew who he was.
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I didn’t say a word all night: Kwasi, said Hill (a staunch Republican), was destined for political greatness.
MMM. Almost exactly a year ago, Kwasi’s brief reign as Chancellor came to an abrupt end when financial markets crashed in response to his mini-budget.
Today, Metro is mired in its own financial miasma, the result of serious financial mistakes made in 2019. Hill is long gone, and while CEO Daniel Frumkin has tried to steady the ship, it still needs to shore up its finances.
A few days ago, facing a financial abyss, it received an injection of £325 million of new capital and at the same time refinanced £600 million of debt.
Although Frumkin is determined to make Metro the number one community bank in the country and wants to open more branches, he faces a huge challenge.
For the moment, customer confidence remains. However, if depositors panic, as Northern Rock customers did at the start of the financial crisis, Metro’s days as an independent bank could be numbered.
The big difference between now and 2008 is that the Financial Services Compensation Scheme is much more generous to depositors when a financial institution fails, offering protection of £85,000.
This should discourage Metro users from rushing to the exit doors. I hope Metro survives its latest crisis. We need banks – and building societies – to support high streets and communities.
Curse of skyrocketing insurance premiums continues
Thank you for all your emails about the curse of skyrocketing auto and home insurance premiums. Please keep coming.
Among the recent batch in my inbox is one from James Robert-Poulain, a 75-year-old retired scaffolder from Bexhill-on-Sea in East Sussex.
James has just watched Liverpool Victoria try to increase the cost of his annual home insurance by 76 per cent. This despite another year of no-claims discount. He wasn’t having any of that and looked for a better offer.
His view is cynical (which I like). James believes the Government is allowing insurers to raise prices because it means more revenue from the 12 per cent tax on insurance premiums that applies to home, car and pet coverage.
James says: ‘The UK has become the stealth tax capital of the free world. What’s really scary is how all the major political parties are trying to increase the tax burden on ourselves. Don’t you know that our nuggets don’t just squeak, they scream? Hit the nail.
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