Card Only? Not Likely: Demand for Cash Is Strong

It’s a common mistake for consumers and businesses to get the idea that cards and digital payment methods are eroding cash usage in the U.K.

That’s just not true. Statistics show that people still prefer real notes and coins for their transactions.

Not only is the value of notes in circulation (NIC) greater than ever but cash also accounts for a rising proportion of the nation’s gross domestic product (GDP), the standard measure of wealth.

Ask the Bank of England. According to the Bank’s latest figures, the total value of cash in circulation has climbed from about £10 billion in 1975, through around £25 billion at the turn of the millennium, to more than £60 billion today.

For larger denomination notes, especially £20 notes, growth is accelerating year on year. At the same time, NIC as a percentage of GDP has soared from a low of just over 2% in 1995 to around 3.5% today.

Substantial demand ahead

These figures prompted Tom Fish and Roy Whymark of the Bank’s Notes Directorate to comment in the Bank’s Quarterly Bulletin.

“Based on existing evidence, it is likely that demand for cash will continue to be substantial in the years ahead,” they said.

Echoing this view, the Bank’s Chief Cashier, Victoria Cleland, said that because there’s a lot of life left in cash, the Bank and the cash industry need to work together to keep it healthy and fit for purpose.

The cash industry is certainly playing its part. For example, driven by consumer demand, the number of ATMs in the country has leapt by 7,000 to more than 70,000 in the last five years, while the number of LINK transactions has risen by around 10 million to more than 260 million in the same period.*

In fact, the closing months of 2015 saw the busiest period ever on the LINK network, with 281 million transactions in October alone. Over £125 billion is dispensed on LINK every year.

In case you were in any doubt, the message is clear: Cash usage is strong and growing.

[cta]Stay ahead of the curve. Meet the demand for cash with DC Payments. Contact your DC Payments representative by email or by phone at 0800 093 2350.[/cta]

* Source: VocaLink