Cash payments alive and kicking, says Bank of England

The rise of new technology is not a threat to cash but the industry should not be complacent, according to the Bank of England's chief cashier and director of notes.

Victoria Cleland said technology has had a "huge impact on the payments industry", with ways to pay including digital currencies, mobile payments and innovations such as contactless cards gaining "real traction".

She added: "We have even considered whether there might be a Bank of England-issued digital currency, but do not envisage this in the foreseeable future."

Ms Cleland said that, contrary to predictions of the eventual death of cash, "if we dig further, it is clear that cash is very much alive and kicking".

One in 20 (5%) UK adults, spread relatively evenly across age groups, relies almost entirely on cash to make day-to-day payments, she said.

"Technology is not a threat to cash - it provides opportunities. The Bank has used the latest technology to introduce state-of-the-art polymer banknotes."

Ms Cleland said much of the resilience of cash is due to the industry's work to meet customer demand.

But she continued: "The cash industry should not be complacent. There are many alternatives and with time more people will move to them.

"The rate of change could increase if the cash industry does not respond by keeping prices competitive, continuing to innovate, and having a model that can effectively support cash in an environment of reduced volumes."

The Bank will launch a new polymer £10 note featuring author Jane Austen in September, following the introduction of polymer £5 notes featuring Sir Winston Churchill last year.

Ms Cleland said: "In July, we will roll out training materials for banks and retail staff, alongside a public communication initiative.

"Together, we have achieved a great deal over the past few years and as we move closer to launching the new £10, we all need to retain this momentum.

"While reliance on cash is less significant than in the past, it is still crucial to everyday life and I encourage the cash industry to continue to innovate, to evolve, and to keep cash relevant and fit for purpose."

Ms Cleland was speaking at an ATM and Cash Innovation Europe event in London.

She said: "On 27 June 1967, 50 years ago almost to the day, the world's first cash dispenser was installed in Enfield, north London.

"In 1972, following innovation from the cash industry, the machines were linked to a central system enabling the 'on line' cash withdrawals on which so many of us now rely."

Ms Cleland said many people are surprised to learn that demand for cash continues to grow.

She said: "The value of Bank of England notes in circulation peaked in the run-up to Christmas 2016, reaching over £70 billion for the first time - an increase of 10% on a year earlier.

"This is the fastest growth we've seen in a decade, and a giant leap compared to the £2.9 billion when the ATM was born."