Bank of England Predicts Future of Cash on 50th Anniversary of ATM

On the 50th anniversary of the ATM, which was first installed in a Barclays banking branch in London, Victoria Cleland, chief cashier of the Bank of England, says cash is here to stay.  Victoria’s statement comes despite huge leaps in the financial services industry recently around digital banking, card payments, contactless payments and e-money.

Below is comment from Laurent Dhaeyer, managing director of Secure Trading, the online payments expert, arguing that while cash will almost surely never disappear totally and everywhere, its use is changing, and the financial services industry needs to be ready for this.

“Predicting the death of cash would be very bold.  It has a fundamental role in modern society which should not be underestimated.  If only in terms of its ubiquity, cash will be here for a long time yet.  That said, banks shouldn’t assume that its use won’t change in line with consumer habits; it’s certainly not a time for them to rest on their laurels.

“While it may be true that 94 percent of UK adults use cash machines, this doesn’t tell the whole story.  Financial institutions need to pay close attention to how consumers are using cash, if they’re to evolve with the market, rather than be left behind by it.  To my mind, it seems that the key to the survival of cash is its ability to be a convenient payment method for consumers.  After all, this is largely the reason why the newer types of transactions – such as contactless – have been embraced by consumers so quickly.

“In the future, we’re much more likely to see a combination of different payment methods, than one clear preference.  Consequently, choice and the ability to integrate with these different methods of payment will be paramount for merchants and banks alike.  Fintech companies are also likely to become more important, as their technology allows solutions to evolve to meet consumer demand.  The real question for financial services firms is not whether cash will or will not be here in years to come, but how they can offer maximum choice to partners and customers to ensure they’re as agile as possible in an increasingly innovative market.”

Secure Trading announced its latest banking partnership yesterday, which supports this transformation of the financial services industry:

http://www.securetrading.com/news/railsbank-secure-trading-partnership/.