Regulators and central banks, through new laws and research, have underscored the usefulness of financial institutions (FIs), merchants and other enterprises giving what we might term cash “choice” across various interactions. This is highlighted as banks are closing branches, or when various populations and households are navigating the demands of paying for goods and services.

The United Kingdom’s Financial Conduct Authority (FCA) has mandated that beginning Wednesday (Sept. 18), banks and building societies (another form of financial institutions) will need to examine how accessible cash is within the surrounding communities — and as ATMs and actual FI branches may be declining, they’ll have to take steps to make sure that that accessibility is still in place.

“Gaps in cash access could be filled with a range of measures, including banking hubs, ATMs (including deposit ATMs) and Post Office facilities. The FCA’s powers won’t prevent the closure of bank branches – but will have an impact where branch closures leave significant gaps in local cash access,” the regulators wrote in a news release announcing its mandate.

Cash is Still ‘Vital’

Added the FCA in a separate post: “While the increasing range of digital services and payments options can make life easier, for many, the ability to withdraw cash is still vital. Cash remains particularly important for consumers with vulnerable characteristics and many small businesses.”

The new rules also mandate that the banks and the building societies must keep branches and ATMs opening and functioning until there are alternative cash access options operational within those markets (such as mobile banking outposts).

The rules come as the U.K. experienced a decline over two years (ending in June 2023) of 1,358 bank and building society branches and 4,450 ATMs. Research has shown that, per FCA data, “being in a low-income household (less than £15,000 a year) and having low digital capability or access has the strongest association with reliance on cash.”

Here in the U.S., the Federal Deposit Insurance Corp. noted in July that most unbanked households in the United States (equating to about 4.5% of households) are “cash only,” meaning they use neither prepaid cards nor nonbank payment apps such as Cash App, Venmo or PayPal.

Separately, the Federal Reserve found in its 2024 Diary of Consumer Payment Choice that “amid increased payments, cash’s share decreased in favor of credit and debit cards, but overall cash use has remained stable as consumers continued to hold more cash than they did before 2020 as both a store-of-value (up 53%) and in their pockets, purses or wallets as a backup payment instrument (up 23%).”

But there’s a divide here, the central bank found, as consumers younger than age 55 used cash for just 12% of payments in 2023, compared to 22% for those age 55 and older. On a monthly basis, consumers made an average of seven cash payments in 2023, a number that has remained stable since 2021, per the Fed’s data. Separate PYMNTS Intelligence data indicates that a truly cashless existence may be a ways off — as only about 19% of all consumers surveyed said that they do not carry cash at all.

In a sign of how digital wallets and other tech-enabled payment methods are taking root, the Fed estimated that consumers used mobile apps for 50% of person-to-person payments, continuing a widespread consumer transition away from paper-based payments.

“More than 90% of consumers intend to use cash as either a means of payment or store of value in the future,” said the Federal Reserve.

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Linfox Armaguard, which moves 90% of cash to the country’s banks, ATMs and retailers, is fighting to stay afloat, Bloomberg News reported Sunday (June 2). The company’s uncertain fate has sparked fears that people and businesses may have to do without physical currency.

“It’s a significant moment for cash use in Australia and may push the nation into becoming cashless,” Chris Vasantkumar, a lecturer in anthropology at the Macquarie University School of Social Sciences who focuses on cash and cashlessness, told Bloomberg.

“It’s clear the current model of getting cash from the places where it’s printed to the places where it’s used, doesn’t seem to be sustainable.”

The report notes that Australians are increasingly hoarding paper money, according to Reserve Bank of Australia data, as people seek ways to guard against payment-system outages and natural disasters.

At the same time, the value of mobile wallet transactions in Australia hit $63 billion ($93 billion in Australian dollars) in 2022, up from $746 million Australian in 2018, a more than 12,000% jump, the report said, against citing data from the country’s central bank.

Meanwhile, recent research by PYMNTS Intelligence finds that a broad range of consumers across income levels and ages are displaying a preference for paying for purchases with cash — as well as debit cards — likely in hopes of better managing their debt levels.

“Paying for items with cash and debit cards can reflect a deeper concern about financial stability,” PYMNTS wrote last week. “And the fact that cash and debit card activity is on the rise for younger and lower-income consumers — up 34% from last year for groceries alone — suggests these two groups are being especially budget-conscious right now.”

Meanwhile, digital wallet usage is also on the rise in the U.S., though the numbers vary by generations, with 79% of Gen Z consumers saying that they are avid digital wallet users, as are 67% of millennials.

The numbers dip the higher up you go: 62% of millennials use digital wallets, as do 44% of Gen Xers, and just 28% of baby boomers and seniors.

“But age is just one yardstick to judge digital wallet use,” PYMNTS wrote. “How much money people earn each year also appears to shape their interest in digital wallets.”

For example, 55% of people who make $100,000 or more per year are digital wallet users, while that number drops to 41% for people who make $50,000 or less annually.

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The central bank also called for an expansion of the Swedish government’s current inquiry into the use of cash to pay for essential goods, the Riksbank said in a Thursday (March 14) press release announcing the publication of its Payments Report 2024.

“Payments must work for everyone,” Erik Thedéen, governor of the Riksbank and chairman of the executive board, said in the release. “In the longer term, all payments may be digital — but until then, cash plays an important role. We need legislation to ensure that cash can be used to pay. Banks must also ensure that more customers have access to payment accounts.”

In one proposal, the Riksbank said that it, other authorities and banks should have a role in ensuring that cash can be transported to and from retail outlets at reasonable prices. Currently, there is only one private company doing that.

The central bank also said banks should be required to accept cash deposits from private individuals. Today, there is no such requirement.

The Riksbank also proposed that banks be required to offer “low-risk accounts” with limited functionality to people, companies and associations that are seen as risky customers and are currently excluded from payment accounts.

In another effort to tailor services to the needs of customers, the central bank proposed that banks and other payment service providers should be required to simplify their payments and identification procedures to accommodate people who have difficulty using digital technology.

To encourage companies and associations to accept cash as payment, the Riksbank proposed that banks should modify their limits on how much cash these entities can deposit in an account. Currently, deposit machines often have “excessively low limits” that make it difficult for companies to deposit their daily earnings, the release said.

The Riksbank also said in the press release that it will work with companies to ensure that payment operations can continue in times of crisis, that it continues to consider the development of an e-krona, and that it is investigating the possibility of expanding access to its payment system, RIX.

This announcement comes about a week after it was reported that Sweden’s neighbor, Norway, proposed measures that will enable consumers to pay with cash at any sales location where other types of payment are accepted.

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By becoming partners of the network, the three FinTechs can offer these services via Green Dot’s network of thousands of retail locations, Green Dot said in a Tuesday (March 12) press release.

“As the demand for cash and cash transactions persists in the U.S., more companies are looking to power their customers with simple, accessible and affordable cash services,” Crystal Bryant-Minter, senior vice president of money movement at Green Dot, said in the release.

The Green Dot Network’s retail locations offer cash-in and cash-out services, according to the release. They also enable customers to move funds digitally between bank accounts.

The network includes more than 90,000 retail locations, including Walmart, Walgreens, 7-Eleven and CVS, the release said.

With a Green Dot Network location within three miles of 96% of the population of the U.S., the network provides access to cash services even in underbanked communities, per the release.

The three new FinTech members join the network at a time when it supports more than 180 partners and brands, according to the release.

“Making these services accessible to consumers and businesses is key to our mission to give all people the power to bank seamlessly, affordably and with confidence, and we’re proud to partner with these companies to help them better empower their customers,” Bryant-Minter said in the release.

With bank branches closing down at a rapid clip, “financial deserts” are taking shape all over the country, Jamison Jaworski, GM-SVP of retail and Green Dot Network, told PYMNTS in an interview posted in February 2023.

“We’re extending convenience to reduce those financial deserts in small towns and other places — and now you don’t have to make a special trip to make a payment,” Jaworski said. “You can now make those payments in the course of your daily life.”

In another recent development, Green Dot said in February that it partnered with Dayforce to power the on-demand payment solution Dayforce Wallet. Through this partnership, Green Dot will facilitate banking services for Dayforce Wallet users in the U.S.

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The proposed measures will enable customers to pay with cash at any sales location where other types of payment are accepted, ensuring they are prepared for emergencies, PYMNTS reported earlier this month, per Bloomberg.

This development follows a statement by Norway’s central bank in May, indicating that although only 3% of consumers in the country utilized cash for their most recent in-store transactions, there has been a notable surge in cash withdrawals from ATMs and retail outlets.

Similar protective measures aimed at preserving cash transactions have also been proposed in neighboring Sweden.

In November of last year, it was reported that Sweden’s central bank had called for urgent reinforcement of cash following a government-led investigation into the state’s involvement in the payment market.

The findings of the inquiry underscored that while access to new payment services has simplified life for many consumers, “digitalisation has excluded large groups of people, [particularly] the elderly, people with disabilities, and those with legal representatives.”

In light of these concerns, the report emphasized the necessity for the state to “assume a greater responsibility” in fostering a more inclusive payment landscape by cultivating a balanced payment ecosystem that caters to the needs of both digital and cash-dependent transactions.

Prior to that in 2018, Swedish legislators attempted to curb the country’s rapid transition toward a cashless society by mandating that the largest banks provide cash withdrawal services and manage daily transactions.

At the time, a parliamentary committee said that “the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled.”

In other parts of Europe, the Swiss National Bank (SNB) stated in February that despite the popularity of payment apps, physical cash will never disappear from use in Switzerland. “Cash acceptance continues to be high and has changed little since 2021,” a survey released by the SNB noted.

The Netherlands has also been exploring public funding for cash supply, Gijs Boudewijn, general manager at the Dutch Payments Association (DPA), told PYMNTS in a 2022 interview.

At the time, Boudewijn said that the DPA was engaging with key stakeholders to ensure that cash remains “available for those who really, really need it whilst at the same time minimizing the cost of the remaining cash infrastructure.”

Cash Is Still King in the US

Meanwhile in the United States, the stance on cash remains resilient, as evidenced by recent remarks made by Lisa Perlini, the Boston Fed’s vice president of Cash Services.

Cash has “stood the test of time because it’s essentially untraceable, it’s easy to carry, it’s widely accepted, and it’s very reliable,” Perlini said. “For example, if the power goes out, and you can’t swipe your card, you can’t purchase whatever is there that you need. So, cash is really important in that situation.”

Perlini also pointed to other characteristics of cash, such as the instant settlement of transactions and the complete anonymity it offers, as attributes that cannot be easily replicated by digital payments.

Overall, although the pandemic paved the way for the anticipated decline of cash, it may have also shown that cash usage, despite being considerably lower compared to previous levels, remains resilient, according to Shaun O’Brien, co-author of the Federal Reserve’s 2023 Diary of Consumer Payment Choice.

In a conversation with the Boston Federal Reserve, O’Brien said, “The environmental factors were almost completely there for cash to go away, and it didn’t.” As a result, they concluded that “people who are using cash just really want to use it, or they really need to use it.”

Looking ahead, the future of cash and how it co-exists with digital payments will likely be shaped by evolving consumer preferences, technological advancements and regulatory interventions.

Ultimately, as society advances toward a predominantly cashless future, the challenge will be to strike a balance that preserves the accessibility and benefits of cash while leveraging the potential of digital innovations.

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These measures are meant to ensure that those who are reluctant to use digital payments can pay with notes and coins, Bloomberg reported Friday (March 8), citing a statement from Justice Minister Emilie Enger Mehl.

The measures are also meant to ensure that society is prepared for emergencies, according to the report.

The proposed measures will ensure that customers can pay with cash at any sales location where other types of payment are accepted, the report said.

Norway’s central bank said in May that while only 3% of the country’s consumers used cash in their most recent purchase at a physical store, there has been a growing number of cash withdrawals at ATMs and shops, per the report.

Similar measures to protect the ability to use cash have been proposed in Norway’s neighbor, Sweden, according to the report.

It was reported in April 2023 that real-time payments volume in Norway was growing at the expense of cash.

Real-time payments volume in the country represented a 6.5% share of total payments volume in 2022 and is expected to reach a 15.1% share in 2027, according to ACI Worldwide’s 2023 It’s Prime Time for Real-Time report.

“This growth is unusual for the region, coming not only at the expense of cash’s share of payments volume but also other forms of electronic payments, showing that consumers are actively moving away from card and ‘slow’ transfers to real-time payments in this market,” the report said.

In 2018, Swedish lawmakers tried to slow down that nation’s move toward going entirely cashless by forcing the country’s largest banks to offer cash withdrawals and handle daily receipts.

“We believe that the continued development of access to cash in society needs to take place in a controlled manner so that the public’s and society’s need for cash is fulfilled,” a parliamentary committee said at the time.

Elsewhere in Europe, the Swiss National Bank said in February that while companies have adopted additional payment methods, “Cash acceptance continues to be high and has changed little since 2021.”

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There are now more $100 bills in circulation than any other denomination, with the number of these bills doubling between 2012 and 2022, The Wall Street Journal (WSJ) reported Sunday (Feb. 25), citing Federal Reserve data.

And as that report noted, these bills are more useful for keeping wealth than spending it. Cashiers won’t accept them, and when they do, they tie up checkout lines as merchants verify the bills aren’t counterfeit. And economists have recommended slowing printing of the bills as they are often used for illegal purposes.

The headaches that come with using a $100 bill can lead people to spend less, Helen Colby, an assistant professor of marketing at Indiana University’s Kelley School of Business, told the WSJ.

It’s what’s known as “the denomination effect,” where the form that money comes in affects the person’s desire to spend it. Colby said that if you make a purchase with a credit card, you get the card back after the transaction, while spending a $100 bill basically “destroys” it.

“A $1 bill doesn’t feel like much but a $100 bill feels very meaningful and beefy,” she said.

Cash use by consumers plunged during the COVID pandemic, and research by PYMNTS Intelligence has found that most people now only carry paper currency out of habit.

The WSJ report cited Federal Reserve data showing that 60% of payments are made with debit and credit cards, with cash now the third-most used payment method in America in terms of the number of transactions.

Still, that doesn’t mean paper money has completely gone away. For example, close to 21% of all B2B transactions completed in the real estate sector are done with checks, while 4% are paid in cash, according to the PYMNTS Intelligence study “The State of Real-Time Payments.”

And a survey released Friday (Feb. 23) by the Swiss National Bank (SNB) found that cash acceptance remains high and has not changed much since 2021. 

In a speech the same day, SNB Vice Chairman Martin Schlegel said that physical cash will never disappear from use in Switzerland, despite the popularity of payment apps.

Speaking at an event, Schlegel stressed the importance of cash for a large part of the population, pointing to countries like Sweden where cash usage fell but still remained after reaching a certain level.

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Speaking at an event, Schlegel emphasized the importance of cash for a large part of the population, citing countries like Sweden where cash usage declined but still remained after reaching a certain level, Reuters reported Friday (Feb. 23).

Schlegel’s comments came on the same day that that the SNB released a survey on payment methods used by companies in Switzerland.

He noted that while the use of cash may decline in Switzerland over the long term, it is difficult to determine the base level, the Reuters report said.

Schlegel warned against a negative spiral where a reduction in banking branches and cash machines leads to less use of cash, per the report. The SNB, Switzerland’s central bank, closely monitors the provision of ATMs and bank branches in the country and is prepared to take action if the downward trend accelerates.

Schlegel refrained from discussing the impact of fewer bank branches after the takeover of Credit Suisse by UBS last year, stating that it was a business decision for UBS, according to the report.

The SNB recently found that monetary policy, including interest rates and foreign exchange interventions, is not currently affected by the decline in cash usage, the report said.

The survey released Friday by the SNB found: “Cash acceptance continues to be high and has changed little since 2021,” the central bank said in a Friday press release. At the same time, companies have adopted additional payment methods, especially mobile payment apps and transfers.

In an earlier survey that focused on consumers, the SNB found that “there is a broad desire among the population for cash to continue to be available as a payment method.”

Elsewhere in Europe, a survey released in January 2023 found that more people reported a decrease in their cash usage than reported an increase.

The European Central Bank (ECB) survey found that 32% of respondents had reduced their cash usage compared to pre-pandemic levels, while 14% said their cash usage had increased. The largest group of respondents — 54% of them — reported no change in their cash usage.

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By leveraging the network, American Express will enable these customers to access more than 40,000 surcharge-free ATMs located in trusted retail locations, NCR Atleos said in a Tuesday (Feb. 13) press release. This offering will be launched later this year.

The American Express brand will be featured prominently during each transaction at these Allpoint ATMs, according to the release.

“Our network powers digital banking leaders such as American Express with the physical endpoints their customers expect and demand,” Diego Navarrete, executive vice president, global sales at NCR Atleos, said in the release. “We look forward to serving more digitally native customers at our Allpoint ATMs.”

The Allpoint Network is the world’s largest independently owned retail ATM network, according to the release.

NCR Atleos was formed in October when technology services company NCR divided into two independent, publicly traded companies: NCR Voyix, focused on digital commerce, and NCR Atleos, focused on ATMs.

The new partnership with American Express is the latest of several new collaborations for NCR Atleos.

In January, Grow Financial Federal Credit Union tapped NCR Atleos to enhance its self-service banking offerings by updating the credit union’s aging ATM infrastructure and expanding its interactive teller machine (ITM) footprint.

In November, NCR Atleos partnered with software firm BHMI to offer a real-time payment solution with back-office functions. In this collaboration, NCR Atleos will resell BHMI’s Concourse Financial Software Suite, which offers features like settlement, reconciliation, disputes management and fees processing.

Also in November, British retailer Asda picked NCR Atleos to bring new ATMs to more than 600 of its stores.

“Allowing simple access to cash and more services in the future is a top priority for us,” Neil Foster, head of Asda Money, said at the time. “We’re really excited about the Atleos vision on how to quickly introduce new innovation to further support our customers.”

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The collaboration, announced Monday (Nov. 27), means that Asda customers will soon be able to withdraw cash from Atleos machines at more than 600 stores.

“By implementing Atleos ATMs Asda will deliver a convenient cash access experience for our over 18 million weekly shoppers,” Neil Foster, head of Asda Money, said in a news release.

“Allowing simple access to cash and more services in the future is a top priority for us. We’re really excited about the Atleos vision on how to quickly introduce new innovation to further support our customers.”

NCR Atleos was birthed last month when technology services company NCR split into two independent, publicly traded companies: NCR Voyix, focused on digital commerce, and NCR Atleos, which is focused on ATMs.

Last month, Atleos teamed with PayNearMe, a payments company specializing in iGaming and sports betting, to boost cardless cash access for iGaming firms. As PYMNTS wrote, the solution is designed to make it easier for customers and players to get their winnings in cash, avoiding the challenges tied to traditional methods of accessing cash from a gaming app.

PYMNTS Intelligence has found nearly 90% of gamers receiving winnings payouts via cash are highly satisfied — more than any other other payment methods. Cash is also the most common form of instant payment for gaming, gambling or lottery payments, per “Generation Instant: Gaming and Winnings,” a collaboration between PYMNTS and Ingo Money.

However, many consumers don’t often carry cash, something a lot of businesses are working to change. As noted here last month, merchants are now offering discounts to customers who pay with cash as they try to avoid credit card transaction fees. 

A Wall Street Journal report, citing data from the Federal Reserve Bank of Atlanta, says that the share of cash purchases that included discounts leaped 66% between 2015 and 2022. Still, payment industry executives say most merchants are hesitant to offer cash discounts or surcharges so as not to turn off customers, as most consumers would prefer to pay using cards. 

In fact, PYMNTS Intelligence has found that 40% of U.S. consumers now carry cash solely out of habit, particularly baby boomers and seniors. A fifth of all consumers identified pointed to habit as the chief reason they carry paper currency.

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