Resilience in Your Wallet: Don’t kill Cash

A quiet revolution is unfolding in our wallets. Cash - once king of payments - is steadily being pushed aside. In the UK, it now accounts for just 12% of all transactions. In the Netherlands, only one in five in-store payments are made with physical money. And in Sweden, just 10% of purchases involve cash.

The message is clear: digital is dominant. But should cash vanish entirely?

The shift is happening fast. ATMs are disappearing from high streets. Lloyds, for instance, plans to close 292 branches in 2025 alone. At the same time, innovation is rising. Lloyds recently introduced a barcode-based deposit feature, enabling customers to add cash to their accounts at over 30,000 PayPoint stores (no ATM required). Just scan, hand over the money, and you’re done.

This kind of hybrid innovation reveals an uncomfortable truth: people still need cash, even as the infrastructure that supports it crumbles.

While digital payments are more convenient, cash remains uniquely valuable. It is:

Inclusive - Cash is universal. No apps, accounts, or digital skills are required. It’s essential for the elderly, the unbanked, and those living in remote areas.
Reliable in crisis - During wars, cyberattacks, or power outages, digital systems can fail. Cash doesn’t.
Anonymous - Cash leaves no data trail. While privacy is often viewed with suspicion, there are situations - such as escaping domestic abuse - where anonymity isn’t a luxury, but a lifeline.
Practical for budgeting - The tactile nature of cash supports better spending discipline. Financial advisors often suggest cash-based budgeting for this very reason—it helps people feel the cost of each purchase and avoid unnecessary spending.

But here’s the catch: the more people stop using cash, the harder it becomes to use. Merchants stop accepting it. Banks dismantle ATM networks. Governments, in pursuit of efficiency, neglect the infrastructure needed to keep cash viable.

This creates a dangerous snowball effect. When a crisis hits - whether war, economic collapse, or a cyber blackout - it may be too late to turn back.

Sweden and Norway learned this the hard way. Once models of cashless societies, both are now urging citizens to keep physical money on hand for emergencies. Norway even passed a law in 2024 requiring all merchants to accept cash.

So, how can we preserve the benefits of cash while embracing digital progress? Several solutions are being explored:

Offline Digital Solutions: Central Bank Digital Currencies (CBDCs) ae being designed with offline capabilities, maintaining access even without network connectivity.
Cash Vouchers or Anonymous Wallets: Transforming cash into digital tokens or anonymous prepaid wallets can preserve privacy and accessibility.
Rule-based money: By linking spending rules to digital money, we can replicate the budgeting benefits of cash. Cfr. my blog "Helicopter money 2.0" (https://bankloch.blogspot.com/2022/07/helicopter-money-20.html), on the concept of niche rule-based money (similar as meal vouchers in many countries).
Hybrid Cash Infrastructure: As Lloyds shows, deposits and withdrawals can happen in everyday retail locations, reducing reliance on ATMs.
Shared ATM Networks: Initiatives like Geldmaat in the Netherlands (joint venture of ABN AMRO, ING and Rabobank) or Batopin in Belgium (joint venture Belfius, BNP Paribas Fortis, ING and KBC) show how banks can collaborate to ensure cash access at a sustainable cost.

We’re at a pivotal moment. Do we accelerate toward a cashless society, accepting the risks and exclusions it may bring? Or do we ensure that cash - at least in some form—remains part of our financial ecosystem?

Governments, regulators, and financial institutions must resist the temptation of digital-only efficiency. Cash isn’t a relic of the past. It’s the ultimate operational resilience strategy.

In the end, this isn’t about resisting the digital wave - it’s about ensuring no one is left behind, and that critical fallbacks remain in place.

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