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!