Governments don’t need to ban cash, we’ll all just stop using it

Cash machines © Getty images
Free cash withdrawals may not be around much longer

Here at MoneyWeek we worry that at some point in the next decade the world’s central banks will cement their control over us all by banning cash, something that would make their jobs as monetary policy makers a whole lot easier (see all of our past columns and blogs on the matter).

However, Andy Haldane, chief economist at the Bank of England, told me last year that I didn’t need to worry about cash being banned. He doesn’t think it will be necessary.

Why? Because we will stop using cash all by ourselves. Using cards or phones is so much easier than using cash (particularly now contactless has taken off).  I didn’t buy this at the time (using cash is the only way to hang on to any privacy these days). But a small article on page two of The Times today makes me wonder.

At the moment, most cash machines don’t charge when you withdraw cash, thanks to the Link network, which connects some 70,000 machines around the country and creates a mechanism for its 39 members to pay for using each others’ machines. Unfortunately this isn’t working for everyone: some members and “particularly those operating in rural areas” say that these payments just don’t cover their costs.

Link members are meeting this week to have a row about the whole thing. But if they don’t work it out, there is a strong chance that you will soon have to pay a fee when you use an ATM (think £1.80 to £2.50). If that happens, and using a card then looks firmly cheaper than using cash, would you use less cash? I suspect you would.

So there you have it. Haldane might never have to actually lobby to ban cash. We will just stop using it all by ourselves – giving up our financial freedom and our privacy as we do.

  • Sceptical

    I don’t trust any ATM not on internal bank premises so would always tend to use a branch if I wanted cash, or get cashback in the supermarket. But of course the number of bank branches is also in decline – no doubt a source of much satisfaction to Mr Haldane.

  • Hugh Jarsse

    I use plenty of cash but hardly ever visit an ATM – the reason – I get all my cash from the supermarket – cashback. Why make an additional trip to the cash machine if you can get your cash needs along with the weekly shop? This is probably a bigger reason why link is suffering – increased competition from other sources. I always refuse contactless payment if offered and suggest other do too. A recent article in Moneyweek by Matthew Lynn indicated cash was more popular than ever. Which is it?

    • Steven Price

      The cashless discussion always makes me laugh. I work in Italy and people were just starting to trust banks more when the financial crisis hit and it was back to square one. Yes, people do use cards a lot, but haven’t seen anyone using contactless payments even though the cards are equipped if you want one. With the mistrust of banks, many people make damn sure they withdraw a certain percentage of their salary in cash every month for safety and to avoid the Italian bank tax on deposits over a certain level.


    Can’t buy drugs with an ATM card…

  • Firebird3

    The black market is far too big for people to give up cash.

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