Traditional M&S Bank restricts clients from settling transactions through cheques and giro systems.
In a move aimed at enhancing security, efficiency, and cost-effectiveness, M&S Bank has announced the phasing out of cash and cheque transactions, as well as bank giro credits. This shift is part of a broader modernisation of payment systems, with many financial institutions embracing digital and real-time payment solutions.
The decision to phase out traditional payment methods is primarily driven by concerns about security and the closing of bank branches. These methods, such as cheques and bank giro credits, are significantly more vulnerable to loss, theft, or alteration compared to electronic funds transfers.
M&S Bank has introduced a pay-by-bank option to replace these legacy payment options. However, this change poses challenges for older customers or those without ready access to digital banking. Many may struggle with adopting electronic payment methods due to technology literacy barriers, lack of bank accounts, or limited internet connectivity.
Regulators and payment firms are increasingly focusing on consumer duty and support to ensure vulnerable populations are not unfairly disadvantaged. Nevertheless, concerns remain about accessibility and user support for these customers.
Caroline Abrahams, Charity Director at Age UK, expressed concern that reducing payment options will limit some older people, especially those not online or who prefer to use cash. Similar concerns have been voiced by Baroness Ros Altmann, a pensions expert and older people's campaigner, who criticised M&S Bank for pushing away their older, loyal customers.
It is worth noting that M&S Bank customers can still pay at a bank without the giro form. Additionally, M&S Bank's decision to stop accepting cheques or giro payments over bank, building society, or post office counters will take effect from October.
Despite these changes, M&S Bank customers can now pay their credit card via the M&S Bank app. The bank has stated that only one percent of customers use the methods being discontinued, with most people paying via direct debit, online, or phone.
M&S Bank's research revealed that 27 percent of people manage their bank account through their branch, while 31 percent are uncomfortable with the idea of banking online. The bank has not mentioned any changes to its policy on ATM cash withdrawals in branches.
In summary, M&S Bank's move to phase out traditional payment methods is aimed at improving efficiency, reducing fraud, and lowering administrative costs. However, this shift poses challenges for older customers or those without ready access to digital banking. Regulators and payment firms are increasingly focusing on consumer duty and support to ensure vulnerable populations are not unfairly disadvantaged, but this remains a significant concern.
- As M&S Bank moves towards digital payments, budgeting and banking solutions are increasingly important for customers to manage their savings and pensions effectively in the industry of personal-finance.
- The transition away from mortgages-related payments like cheques and bank giro credits towards digital options requires consumers to have a good understanding of these new methods to ensure they're not losing money due to insecurity or user error.
- The banking-and-insurance sector should take into account the needs and concerns of older customers who are not tech-savvy or lack easy access to digital banking, as the increasing focus on consumer duty suggests.
- Some customers may need assistance in adopting digital payment methods, such as those with limited internet connectivity or a lack of bank accounts, which could be addressed by industry initiatives to boost accessibility and user support.
- In light of criticism from organizations and pensions experts for pushing away older, loyal customers, M&S Bank should consider offering more flexible payment options that cater to different preferences and capabilities among its clientele.
