Cash isn't quite dead.. yet!
Cash payments fell as a proportion of payments used in transactions from 80% of all transactions in the 1990s to just 15% in 2020.
Covid acted as a spur to the decline because of people's increased reluctance to handle cash, and more and more businesses have gone cashless. More than 7000 cash machines were shut down in the UK during Covid.
However after this decline, the British Retail Consortium revealed that the transaction proportion for cash increased back up to 18.8% in 2022.
In 2022, cash was used to pay for.....
- £3.6 bn in rent
- £2.35 bn for gas and electric
- £694 million council tax!
At the end of 2023 there were still £81.3bn of banknotes in circulation, and astonishingly this is an increase from £69.8 bn at the end of 2019.
That's the equivalent of £2882 for every household in Britain.
There are also growing numbers of people who believe the push towards a cashless society is a conspiracy of control by governments and corporations.
Managing the Money....
It isn't banks who circulate notes anymore, it is primarily four companies: The Post Office, G4S, NatWest Bank and Vaultex. These process cash payments and redistribute them as appropriate.
They process this cash in 14 secret cash warehouses around Britain, which can hold several hundred million pounds at anyone time. It is up to the companies to check on the viability of the notes.
Cash is here to stay...?
While many larger companies are going cashless, there are more and more smaller businesses who are becoming cash only. It costs to use cards, with the transaction fee being anything from 0.2% to 2.2%, however being a cash only company runs the risk of attracting the never wanted attention of the HMRC.
It seems that, for now, cash is here to stay, at the end of the day people just like the feeling of notes in their wallet!
Sources... Inspired by The Sunday Times 2024, The Secret Life of the Bank Note: why Cash Isn't Dead!
Posted Using InLeo Alpha
If they scrap cash, I guess we can move on to phone cards and cigarettes as an alternative monetary system! That being said, I do love paying with permissionless crypto!
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Hopefully cash will stay. But yes stock up on alternatives just in case!
How is anyone going to shout 'Show me the money!" if we have no cash? :)
An important consideration for sure!
I still use cash to some extent, but a lot of people don't carry any. I've been to cafes in London that don't take it. I'm not sure about conspiracies, but I think it's just convenient for businesses. Most don't really care about tracking you. I wonder if the rate of cash robberies has gone down at all.
You'd suspect so for the number of robberies... Crime tends to change along with the opportunity!
To speak about my country, many people are kinda obliged to use credit cards rather than cash as their financial situation does not allow spensing cash to survive.
Dodgy take-aways are always 'CASH ONLY', cash is king, I am a fan.
Of cash only, dodgey takeaways. or both...?!?
Oh, just the former, the latter risk poison 🤢..
Yup, it's very much alive here. Most of the local shops and market only accept cash.
The best part of 19%! Wow, and this is only recorded transactions.
I spoke to two people at the weekend who are cash-only. One said it enabled him to manage his money better, with plastic you could easily spend beyond your means without realising. The other said he liked the social interaction with (and in, and on the way to and from) the Post Office, where he pays his bills, and shops where he's making purchases.
When I was part of a Worklessness and Poverty Commission at a London borough, one of the "unknowns" was the extent of the cash economy and how it worked and the impact it had on people's lives.
The Bank of England's policy is to retain cash because of the large numbers of people who use it and rely on it.
I've had to start getting change because the laundrette here is cash-only!
Yr right I bet a lot of txs are not recorded! I do like using it myself and it does make tracking easier. We shld go back to cash books too maybe..?!
Cash is king, no doubt but I am not sure it will still be king in 20 years from now. One of the reasons why small businesses still use cash is because it is available. If cash goes scarce as a result of facing a cashless economy, small businesses will be forced to add the 0.20% or 0.40% (depending on the institution and country) to the price of their goods and services. Over the last 5 years we have seen tremendous increase in cashless activities and we will surely see more in decades to come.
I guess it all depends on the various States of the world! They don't seem too keen on getting rid of it in the UK!
Nothing will replace the feeling of a stack of cash in ones hand or cashing that first check one earns from their first job. I'm not sure a transfer directly into ones account replicates that feeling but it would be hard for me to say if that is fact or not. I do believe CASH use will eventually be weeded out for many reasons. One reason being eventually the worlds currency will gravitate to some form of cryptocurrency. Fiat transactions been taking baby steps in that direction without most even realizing it. Such as the simple credit card transactions most do. Cash isn't instantly being swapped just numbers from one card to someone who accepts those numbers in exchange for goods or services. Sounds very similar to a cryptocurrency with a use-case of being the pair to cash.
Maybe it's just a nostalgic habit we need to get over! Cash, that is!
I don't use it much myself, only when I know I've got a tight month coming up I might take a few hundred quid out to ration myself, but that doesn't happen very often!
I have experienced the opposite in the last few weeks here in South Africa with many retailers now not accepting cash. M&S was one of them which they had to open another till for my cash purchase. Another store I visited was totally cashless and I walked out and the big chains now only have set tills for cash which is worrying.
Stock up on matchbooks, easily dividable, useful and tradeable. They even look like money.
Stirling advice!
Since Covid, I hardly ever have cash on me, but recently someone said something that made me think. I was drinking with a friend who has always done bar work, and we were discussing this very topic ( nobody has cash). He said he always has a little cash so he can tip in cash as he doesn't trust tipping via a card to reach the intended destination (and it's taxed).
I like this idea, and now carry a little cash for just that purpose,for everything else I use a debit card
Fair point, it is useful for tips!
Some interesting discussions here. I know some parts of the USA have made it illegal for businesses to be cash only because of the concern that poorer members of the community, who are often non-banked, are effectively excluded from using cashless venues.