What Does The Payment Systems Regulator Need? A NEW SOURCE OF STATISTICS!

Posted on: 26/06/2019

The document released by the UK Payment Systems Regulator (PSR) earlier this month

"Considering the incentives to deploy free-to-use ATMs in the LINK network"

is full of statistics produced by UK Finance, whose name makes it sound like it is the organization which runs the UK economy, whereas it is actually a trade association for the UK financial services sector.

For example, UK Finance claim "cash was used for 34% of all payments in 2017, down from 61% a decade earlier". They further claim that  "cash withdrawals from ATMs as a whole have fallen by around 17% since their peak in 2012".

It is, of course, kind and generous of UK Finance to produce all of these statistics. You wonder why they bother...

In other countries, the national Central Bank will regularly provide a veritable mine of information about payments in their local market.

Sadly, the Bank of England doesn't seem to have the time to do so, though they have paid some academic chap to produce a 148 page report called " The Future of Finance", which basically tells us we are all going to be completely digitalised, like it or not.

Thanks, Prof! I will stick to my mantra of "Payment Choice for ALL, FOREVER"!

Anyway, back to statistics.

One figure the Bank of England DOES produce is the value of banknotes in circulation.

Now this IS an interesting statistic from the Old Lady!

Lets go back to 2007, the year UK Finance claim 61% of all payments were made using cash. That year, the Bank of England figures show that the value of banknotes circulating in the UK was under £40 Billion - but lets just round it up to £40 Billion for ease of calculation.

Lets move forward a decade to 2017, the year when UK Finance claim cash accounted for only 34% of all UK payments, a fall of 44%. In that same year, the Bank of England figures show that the value of banknotes in circulation had risen to £68.876 Billion - lets call that £69 Billion, once again for ease of calculation.

So according to the Bank of England, the value of banknotes in circulation in the UK increased from £40 Billion in 2007 to £69 Billion in 2017.


Oddly, nowhere in the PSR document is this figure mentioned, presumably because it is not produced by UK Finance....

So, according to UK Finance, ATM cash withdrawals are down and cash used for payments is down.

So where did all of these new banknotes come from?

Perhaps from Bank Branches?

BUT 50% of the UK's Bank Branches have closed since 2007. So, logically, the remaining branches are surely providing only 50% of the cash that used to come over branch counters?

Maybe the Tooth Fairy is leaving the cash under millions of pillows, though with the improvements in dentistry, that seems an unlikely route for the growth in circulating cash.

So it remains a mystery.

Cash is dying - or so the story from UK Finance goes - YET there is so much more of it in circulation....

I must go now. I have to check the height  my bed is off the ground. 

Maybe that's it. So many of us, not using cash for anything else (?), keep it under our beds for a rainy day?

Though it doesn't often rain under my bed...... 




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