• Michelle Comfort, Senior Manager at PSE Consulting


• 11.04.2025 06:15 pm
#FutureOfCash #DigitalPayment

Despite the rapid rise of digital payments, cash continues to play a crucial role in everyday life, particularly for those who rely on it for financial control and security. While cash usage is steadily declining across many countries, its importance hasn’t disappeared—especially for individuals managing tight budgets or preparing for unforeseen crises. Whether as a budgeting tool or a safeguard in times of instability, cash remains a lifeline for many. 

However, as access to cash diminishes and more businesses move away from accepting it, questions arise about whether this transition is happening too quickly and what can be done to ensure cash remains available when people need it most.

Cash is Vanishing…and Fast

In recent years, cash usage has consistently declined in the UK and across Europe. In the UK, cash accounted for just 14% of all payment transactions in 2022, falling to a mere 12% in 2023, according to UK Finance. Meanwhile, in the Eurozone, the European Central Bank’s surveys show that cash was used for 59% of in-person Point-of-Sale (POS) transactions in 2022, dropping to 52% by 2024. This downward trend is reflected in the number of physical bank branches and Automated Teller Machines (ATMs) available to consumers. In the UK, the number of ATMs has fallen by 37% over the past decade, a trend also seen in countries like the Netherlands, France, and the Nordic region.

More Retailers Say ‘No’ To Cash

As cash becomes less common in the general population, a growing number of retailers are following suit by choosing not to accept it. Once an option predominantly seen in small coffee shops, this shift is now being adopted by larger, national brands in the UK. For instance, Gail’s bakery chain, which has more than 150 outlets, along with restaurant brands such as Itsu and Zizzi, no longer accept cash payments. Pret a Manger even began trialling cashless stores in 2024. According to the European Central Bank, 12% of consumer-facing businesses in the EU were cashless in 2024, a significant increase from just 4% in 2021. 

Why Cash Still Matters

This rapid transition to a cashless society has raised two major concerns. Amidst rising living costs, many consumers rely on cash to manage their budgets effectively, as physical currency helps reinforce spending limits. In fact, cash usage in the UK saw a slight uptick in 2022, with the British Retail Consortium reporting that cash accounted for 19% of retail transactions, up from 15% in 2021—the first increase in a decade, underscoring its ongoing relevance for budgeting.

Beyond personal finance, cash also serves as a critical safety net during times of crisis. As geopolitical tensions and economic uncertainty grow, access to physical currency provides security and stability. Sweden, despite its push toward a cashless society, recently advised citizens to keep cash on hand for emergencies, while neighbouring Norway mandated in late 2024 that all businesses must accept cash. These developments highlight the enduring importance of cash as both a financial management tool and a fallback in periods of global instability.

What Can Be Done?

As the decline of cash accelerates, there are growing calls for intervention to ensure its continued availability, particularly for essential services. 

Protecting Access to ATMs 

The provision of ATMs, particularly free-to-consumer machines, faces several challenges. While banks do earn modest revenue through reverse interchange (the fee paid by card issuers when customers use a different bank’s ATM), the overall business case for ATMs is weak. ATM operators must also account for the cost of maintaining cash stock (which earns no interest), hardware investments, and security. A possible solution could be to tweak the economic model of ATM deployment, such as the Netherlands’ “geldmaat” iniative. This project involves pooling resources from multiple banks to create a shared ATM network, helping ensure that consumers can still access cash without the financial burden falling solely on one institution. 

Rethinking Cash Acceptance Rules 

Campaigners in the UK have advocated for a legal requirement that all retailers accept cash payments. However, this appears unlikely in the short term, given the costs to businesses. Cash acceptance involves significant operational challenges, including handling security risks, managing coins for change, and dealing with the logistics of depositing cash at increasingly distant bank branches. Moreover, governments have little incentive to encourage cash usage, as it is often linked to the informal economy and can reduce tax receipts. 

One potential compromise could involve a partial mandate: requiring businesses in essential sectors, such as grocery stores and pharmacies, to accept cash payments. This would help ensure that people who rely on cash for budgeting and in times of crisis still have access to necessary goods and services.

Managing the Decline, Not Eliminating Cash

While the decline of cash may seem inevitable in a rapidly digitalising world, it is crucial to manage this transition thoughtfully to avoid leaving vulnerable populations behind. Cash is still an essential tool for budgeting, crisis management, and maintaining financial security for many consumers. 

Ensuring that cash remains available through targeted interventions, such as shared ATM networks and partial cash acceptance mandates for essential services, will help preserve its role in society. Cash may not be entirely obsolete yet, but its slow decline needs careful attention to ensure it remains a viable option when it’s needed most.