As a city faced with bank closures

The UK’s big four High Street banks closed, or announced the intention to close, for a total of 948 branches in the course of 2017.

The banks accused the progress of the technology, with customers turning to the internet and smartphones for day-to-day banking.

However, a town in Flintshire believes that the economic damage caused by branch closures could be reversed – by the technology.

A scheme allows small firms in Holywell to accept payments via smartphone.’Turning point’

Three of the four bank branches in the town have closed, as of December 2016, leaving the customers and the businesses struggling to access cash.

Now, the US technology company of the Square, in collaboration with the local council, has offered the technology – a reader connected to the phone – for the small traders who had previously been put off accepting cards because of the high rental costs of the terminals.

These small businesses, the payment of a fee equal to 1.75% for card transactions in-store, or 2.5% when customers use their cards over the phone or online.

Even if these costs are not very different from the existing card processing costs, a big difference is that the retailers do not have to pay for the lease of the reader and are not locked into a complex, the rate of minimum payment.

Phil Jones, who runs a computer shop in Holywell, has told Newsnight that he had previously accepted card payments, but had given up because the costs outweighed any benefit to his business. Like him, more than 90% of traders that have signed the contract for the new scheme.

The mayor of the city, Joe Johnson, said: “I can definitely see a trend reversal to the dismay of the original banks to close for people with a positive feeling about the city. We need to make a lot of changes, and it is not a silver bullet that is going to solve everything, but it certainly helps.”

In the UK, the new challenger banks that operate online, and so, in part because of the competition, the traditional banks are falling, the branches too.

In 2017, the RBS, which includes NatWest, closed or announced that it would closed 471 branches – more than a third of the network.

Lloyds Banking Group, which includes Halifax, Bank of Scotland, closed or announced the closure of 250 branches. Barclays has closed the 98 branches, and HSBC closed to 129, the data compiled by BBC Newsnight found.

The total number of branches the big four banks stood at 5,354 at the beginning of 2017. Within the next few months and that the total will have dropped to 4,406, which means that one in six of the branches have closed in a little over 12 months.

The banks, said many customers preferential access to your account online. As a result, they used branches less often for day-to-day banking.

The response from Barclays is typical.

“With the customers who visit our branches less each year, you must always evaluate how and why our branches are used and make decisions on the basis of that vision,” a spokesman said.

“Where we do take the difficult decision to close a branch, we work closely with the local community to understand their needs, and if there is an alternative solution, we are able to provide.”

The banks will still visit Holywell. A NatWest mobile banking van set once a week in the municipal parking lot. However, the economic effect of branch closures has been felt.

Since the banks closed, there was only an ATM machine to the left into Holywell High Street. Able to easily withdraw cash, many customers preferred to visit the largest out-of-town shops that accept card payments.

Karen Lloyd, who manages The Flower Bowl florists in the city, said that the banks ‘ departure was devastating to the small businesses, which require branches to deposit their cash takings.

“It is not enough of a leap for the bank, you have to go physically in another country,” he said.
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For the most part of the city the story would have ended there – with empty buildings and a sense of decline. It may have been the same for Holywell, had it not been for a chance conversation between the local MP and Square-executive, Sarah Harvey.

“The piazza is a relatively new business in the UK and we only launched in March this year we were really keen to get closer to a city such as Holywell to really understand the issues that small businesses have and see if there was anything that we could do to help,” said Ms Harvey.

The american company has done something similar in Iowa.

The results, according to traders not already locked into a payment terminal leases, has been positive.

If it is true that many people now bank online, internet connections outside of the city, are not so good.

Free payment card readers are not going to solve these challenges, but the city council says the project’s main benefit is to restore a bit of belief in this city.

See David Grossman’s full report on Newsnight