Cash has just five years left, warns ATM boss

[Jonathan101]

https://uk.yahoo.com/finance/news/cash- ... 00760.html

The chief of the UK’s largest ATM network has warned that cash has as little as five years left, as the country’s infrastructure experiences “death by a thousand cuts”.

“The cost of providing cash infrastructure, which includes the ATMs, security and bulk cash centres is huge at £5bn a year,” said John Howells, chief executive at Link. Many of these costs are fixed and will not change as consumers move to digital payments.

Since the beginning of the pandemic, “cash use is down by 40pc – and is still falling,” he added. A recent report from UK Finance, the banking trade body, estimates that just one in every 20 transactions will be made using cash by 2031.

“This infrastructure will start to fall apart unless something is done, and we are already seeing ATMs and branches closing at a worrying rate,” said Mr Howells. “Our cash infrastructure is experiencing death by a thousand cuts.”

Patrick Mulholland
Sun, 28 August 2022 at 6:00 am
cash machine
cash machine
The chief of the UK’s largest ATM network has warned that cash has as little as five years left, as the country’s infrastructure experiences “death by a thousand cuts”.

“The cost of providing cash infrastructure, which includes the ATMs, security and bulk cash centres is huge at £5bn a year,” said John Howells, chief executive at Link. Many of these costs are fixed and will not change as consumers move to digital payments.

Since the beginning of the pandemic, “cash use is down by 40pc – and is still falling,” he added. A recent report from UK Finance, the banking trade body, estimates that just one in every 20 transactions will be made using cash by 2031.

“This infrastructure will start to fall apart unless something is done, and we are already seeing ATMs and branches closing at a worrying rate,” said Mr Howells. “Our cash infrastructure is experiencing death by a thousand cuts.”

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An estimated five million people who rely on cash – many in rural locations or less well off – are at risk of being left behind unless more is done to help them adapt to digital, Mr Howells said.

“We have 5-10 years to fix digital payments before cash becomes unworkable, and need to start planning how to get the new system working for all.”

Link runs the UK’s network of around 54,000 cash machines and works with almost all UK banks and card issuers.

According to Link, the number of free cash machines has dropped by more than a fifth in four years, from 52,358 in 2018 to 40,830 today.

Next month, parliament will return from its summer recess to consider legislation that will protect access to cash, as outlined in the Queen’s Speech earlier this year.

Mr Howells expects Link to be handed the responsibility of setting up shared banking hubs in communities that have lost their last branch.

Under pilot schemes in Cambuslang, Lanarkshire, and Rochford, Essex, banks have worked jointly to offer basic cash services through designated high street hubs. Ten more locations are in the process of being set up across the country.

Natalie Ceeney, chairman of the Banking Hub Company, said a few hundred hubs will be needed to meet demand and to prevent the UK “sleepwalking into a cashless society”.

Funny thing is, last time I was in the shop, the customer and the clerk were talking about how MORE people are using cash, because it feels easier to keep track of, because of the recession we are in.

[Madner Kami]

It's bogus bullshit anyways. The infrastructure that ATMs run on are there regardless of their existence or not. It's called the Internet (or in cases of ATMs inside a bank, the LAN or, heaven forbid the idea, the WLAN of the bank) and electric wiring in every building. The only running costs are restocking the ATMs with cash, which is non-existent in a bank (the employees are there anyways) and minimal for non-bank-located ATMs, as the cash-transporters who restock those ATMs are needed for the banks and many shops anyways. I mean, sure, you could remove the entire cash-transport and -security industry, but somehow I have doubts that this is such a huge drain on resources in the first place.

[hammerofglass]

So does the UK government prevent them from charging a usage fee? ATMs in the states generate significant profits and you can find them everywhere.

[BridgeConsoleMasher]

Similar to this, you hear a lot of energy companies that undermine environmental reports.

[Jonathan101]

So does the UK government prevent them from charging a usage fee? ATMs in the states generate significant profits and you can find them everywhere.

Most ATMs don't have a usage fee, no (the ones that do usually say so).

I don't know about the government "preventing" them though- it might just be policy.

[BridgeConsoleMasher]

So does the UK government prevent them from charging a usage fee? ATMs in the states generate significant profits and you can find them everywhere.

Most ATMs don't have a usage fee, no (the ones that do usually say so).

I don't know about the government "preventing" them though- it might just be policy.

You should always be skeptical of any intermediary service speculating for the concern of the service as an essential need.

It's not as grossly concerning as the example I gave above at all. But I feel the fall of cash has quite a bit of margin for overall impact on society.

[McAvoy]

Haven't we been hearing this for awhile now? I know this is UK but it's has been talked about in the US too.

It's almost like doing away with the penny in the US. Costs more to make a penny then how much it's worth. The idea is round down or up to nearest nickle, that over time it would even out.

[BridgeConsoleMasher]

Haven't we been hearing this for awhile now? I know this is UK but it's has been talked about in the US too.

It's almost like doing away with the penny in the US. Costs more to make a penny then how much it's worth. The idea is round down or up to nearest nickle, that over time it would even out.

The cost of production doesn't invalidate the efficacy of a medium of exchange though. It is true that money acts as a store of value as one of its three distinct functions, which makes the cost of production self defeating. The commercial value for a medium of exchange though far outweighs its production cost. I wouldn't be surprised if the dollar bill is cost inefficient given that millions of notes are scheduled to be destroyed every day.

[ProfessorDetective]

Haven't we been hearing this for awhile now? I know this is UK but it's has been talked about in the US too.

It's almost like doing away with the penny in the US. Costs more to make a penny then how much it's worth. The idea is round down or up to nearest nickle, that over time it would even out.

The cost of production doesn't invalidate the efficacy of a medium of exchange though. It is true that money acts as a store of value as one of its three distinct functions, which makes the cost of production self defeating. The commercial value for a medium of exchange though far outweighs its production cost. I wouldn't be surprised if the dollar bill is cost inefficient given that millions of notes are scheduled to be destroyed every day.

Yes, but then there's also the fact that pennies are barely spent anymore. No vending machine takes them, few PEOPLE want to take them, and they often end up collecting dust in jars and jugs across our nation, MAYBE eventually getting dumped into change counting machines like CoinStar. I say drop the penny and bring back the half-dollar.

[McAvoy]

Haven't we been hearing this for awhile now? I know this is UK but it's has been talked about in the US too.

It's almost like doing away with the penny in the US. Costs more to make a penny then how much it's worth. The idea is round down or up to nearest nickle, that over time it would even out.

The cost of production doesn't invalidate the efficacy of a medium of exchange though. It is true that money acts as a store of value as one of its three distinct functions, which makes the cost of production self defeating. The commercial value for a medium of exchange though far outweighs its production cost. I wouldn't be surprised if the dollar bill is cost inefficient given that millions of notes are scheduled to be destroyed every day.

Yes, but then there's also the fact that pennies are barely spent anymore. No vending machine takes them, few PEOPLE want to take them, and they often end up collecting dust in jars and jugs across our nation, MAYBE eventually getting dumped into change counting machines like CoinStar. I say drop the penny and bring back the half-dollar.

Yeah. No one is going to carry a pocket full of pennies. What usually happens is the penny is given as change and may be reused on a SD ond or third purchase. If not the consumer goes home and empties out the pockets and it goes into a change jar.

Women may be the only real user of the penny due to carrying a change purse, or something that can carry change long term.

I am one of those that empties out my pockets at the end of the day and do not carry change at the start of the next day. So yeah I got a water jug of pennies. Just like my parents who have about three of them now. Also my Dad has about eight Chinese plastic containers of all change.