Consumers in the UK today enjoy unprecedented choice when it comes to making payments and managing their money. Given this choice, people are making full use of the range of channels available to them. The ATM, mobile, online, phone and smartphone are all important to consumers.
As easy as it is now to transfer funds using a mobile phone or to complete a contactless transaction, consumers in the UK do continue to rely on cash. That’s made clear by the latest figures from ATM network LINK, which show that the UK recently had its busiest-ever day for cash machine withdrawals.
A vital part to play
The UK’s 70,000 ATMs – of which almost 54,000 are free to use – dispensed more than £12 billion ($14.5 billion) in December 2016. That’s 3.5 percent more than in December 2015, when customers withdrew £11.6 billion.
December 23rd 2016 was the busiest day in history for LINK ATMs in the UK, with consumers taking out a total of £730 million, at an average of £87 per withdrawal. The new record is way ahead of the previous high of £634 million, recorded on December 24th 2015.
John Howells, chief executive of LINK, said: “With this record for ATM withdrawals, it is clear that cash plays a vital part in so many people’s lives, and we fully expect it to do so for many years to come. With over 70,000 cash machines in the UK, LINK is committed to making sure consumers have safe and reliable access to their cash.”
The figures send a clear message to banks and the financial services industry as a whole: people still want and need cash. The ATM is still a trusted, reliable and familiar self-service channel, regardless of how many digital or mobile alternatives are available. This is particularly true during peak periods of consumer activity, like Christmas, when financial institutions need to ensure all channels are ready for a spike in demand.
It’s not just in the UK that customers have made it clear they still want to use cash. The 2016 Consumer Holiday Shopping Report from NerdWallet revealed that nearly half (49 percent) of all Americans – and 60 percent of millennials – were planning to use cash to buy Christmas gifts last year.
What does the future hold for cash?
It’s clear that the oft-talked about cashless society is still a long way off, but could there be some point in the future when physical currency is no longer required? It’s possible, but still hard to imagine, certainly in the foreseeable future.
Smithers Pira, a market research firm specializing in the packaging, paper and print industry supply chains, this month released a report offering some interesting perspectives on this debate. It predicted that the global market value of the banknote printing industry will increase from $9.5 billion in 2016 to $11.2 billion in 2021.
This suggests a bright future for physical currency. However, report author Rudie Lion pointed out that the annual reports of central banks from all over the world are united by the theme of “less cash”.
“Some central banks are pursuing policies intended to achieve a cashless society; others are more benign – merely mentioning the need to reduce the cash-to-GDP ratio,” he said. “While the vision of a fully cashless society is utopian, and cash will remain the predominant method of payment for the near future, the drive for less cash is real and immediate.”
A recent opinion piece in Guardian warned that the move towards cashless cities creates a “real danger of exclusion”. In India, meanwhile, the chairman of the State Bank of India has argued that it will be impossible for the country ever to remove cash entirely.
This is clearly a complex debate that looks set to rumble on for decades. For the time being, billions of people across the globe continue to rely on cash, and it’s down to banks and the financial services industry to provide maximum choice and freedom for their customers.