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ATM & Cash Innovation Europe
The Bank of England’s perspective
on the future of cash
Victoria Cleland, Chief Cashier
13 June 2017
50 Years Ago… 1967: £2.87bn of notes in
circulation
Technology Has Changed The Way We Live Our Lives
Alternatives More Widely Available And Accepted
Plastic cards
Mobile payments
Local currencies
Electronic payments
Digital currencies
‘UK moves towards cashless society’
Independent, May 2015
‘The end of cash as we know it?’
The Telegraph, May 2015
‘Cash still king for consumers as ATM numbers reach all-time high’ LINK, May 2015
Polarised Media Coverage
Demand For Cash Continues To Grow
0.00%
0.50%
1.00%
1.50%
2.00%
2.50%
3.00%
3.50%
4.00%
4.50%
5.00%
0
10
20
30
40
50
60
70
1975 1980 1985 1990 1995 2000 2005 2010 2015
NIC:GDP %
BoE Notes in Circulation
(£bn)
£1 £5 £10 £20 £50 NIC/GDP
6.1% 12.8% 7.2%
4.8%
Selected annual growth rates from 2016/17
1967 2017
NIC
The Number Of Cash Payments Is In Decline…
Source: Payments UK
Whilst the value of cash payments has remained fairly steady
A Similar Story With ATM Withdrawals*
46,000
47,000
48,000
49,000
50,000
Value of withdrawals (£mn)
500
550
600
650
700
750
800
Number of withdrawals (mn)
Source: 2017 Q1 ATM Market Report
*Quarterly data smoothed to demonstrate
trend
What Is Cash Used For? Transactions
The shadow economy Overseas demand
Domestic hoarding
Budgeting =====
Ease of Use =====
Acceptability =====
Anonymity =====
Contingency
Why?
Potential Drivers
Domestic hoarding
Interest rates Trust in financial institutions
Contingency
The shadow economy
Tax levels Labour market regulations Government intervention
Overseas demand
Exchange rates
Migration
Tourism
Transactions
Availability of alternatives
Cost to merchants
Cyber/data capture
Consumer attitudes to cash:
- Ease of use
- Budgeting
What Might Influence Future Demand For Cash?
Bank Of England View: There Is A Future For Cash
• Relied on by some, valued by many
• ING: Only 21% in UK would go completely cashless if
they could
• 2017 UK Payment Markets: 2.7 million people in the
UK rely on cash, 5% of all adults, relatively evenly
spread across age groups
The Cash Industry Has Played A Key Role In Making
Cash Relevant And Acceptable
ATM dispense targets
Code of Conduct for the
Authentication of
Machine-Dispensed
Banknotes Polymer Transition
There Is A Future For Cash: We Must Continue To
Invest In It
• Successful £5 launch
• Industry engagement for £10
• Unveil 18 July 2017
– Educational materials
available
• Issue September 2017
• Only polymer £10s issued after
launch
• Businesses need to be prepared
“Surprises are foolish things. The
pleasure is not enhanced, and
inconvenience is often considerable.”
Jane Austen, Emma (1816)
