COVID-19 & The Collapse Of Cash

Authored by Steven Guinness,

In my last article I referred to how since fears of Covid-19 in the UK took root in March, cash usage has fallen dramatically. Whilst the drop off has been substantial, the trend of cash payments being in decline is long established. Based on early evidence, the coronavirus pandemic has exacerbated this decline.

For context, in March 2019 an Access to Cash Review was published which detailed the precarious state of Britain’s cash network. The review, funded by Link (the UK’s biggest cash machine network) showed that over the past decade cash payments had fallen from 63% of all payments to 34%. To quote the report directly, ‘a straight-line trajectory of current
trends would see an end of cash use by 2026‘.

Twelve months on, the predicament with cash is now far more serious. Before getting into that, here is a summary of where we find ourselves in regards to cash in the midst of Covid-19.

In January the severity of the coronavirus spread in China became more apparent by the day. The first case of the virus was reported in the UK at the end of the month, weeks before cash usage began its descent. To give an idea of how the cash network infrastructure looked at the time, we can use Link’s monthly ATM Footprint Report as a guide. The most recent report shows that between January 2018 and February 2020, the number of free-to-use ATM’s had reduced from 54,500 to 45,000 – a 17% drop in just two years that equates to 9,500 ATM’s.

News coverage on the coronavirus began to ramp up into February. A development that received only moderate attention was the news that the People’s Bank of China had started to disinfect banknotes. According to Fan Yifei, the deputy governor of the PBOC, this was being done to ‘secure the public’s safety and health when using cash‘. It was around this time that the World Health Organisation first reported that Covid-19 can be transmitted via contaminated objects. As yet, they had not specifically referred to physical money. The PBOC’s decision to disinfect billions of Yuan in banknotes was the first connection made between the use of cash and the possible spread of the coronavirus, but without any direct evidence to support it.

It was in March when the fear gauge on cash spiked. The Daily Telegraph ran a story at the beginning of the month with the headline, ‘Dirty banknotes may be spreading the coronavirus, WHO suggests‘. Once again, the article contained no concrete evidence of contamination and instead relied on supposition. Asked if banknotes could spread Covid-19, an unnamed spokesperson at the World Health Organisation was quoted by The Telegraph as saying:

Yes it’s possible and it’s a good question. We know that money changes hands frequently and can pick up all sorts of bacteria and viruses and things like that. We would advise people to wash their hands after handling banknotes, and avoid touching their face. When possible it’s a good idea to use contactless payments.

Offering a more open position, an unnamed spokesman at the Bank of England was quoted as saying that whilst banknotes can transmit bacteria and virus, ‘the risk posed by handling a polymer note is no greater than touching any other common surface, such as handrails, doorknobs or credit cards.’

A few days later the Telegraph’s story was picked up by the Daily Mail, further cementing the perception that to use cash was potentially endangering your health. The use of handrails, doorknobs or credit cards were not afforded the same coverage.

But here is where things begin to get rather murky. As mainstream outlets were ratcheting up unsubstantiated fears over cash usage, Stephanie Brickman from the WHO offered a different perspective. Brickman was quoted by Euro News as saying:

We do not know [how long the virus lasts on banknotes], but we estimate not longer than two hours. The virus will not survive for very long on surfaces, particularly on a dry surface like a banknote.

Whilst the virus could possibly be contracted ‘by touching a surface or object‘, banknotes were not being considered, according to Brickman, as ‘a main source of infection’.

Euro News also quoted Sizun Jiang, a virology expert and postdoctoral research fellow at Stanford University. Jiang said:

Disinfecting and bringing new notes into circulation would benefit more physiologically than actually reduce the infection rates drastically. More importantly, there are countless other surfaces that we interact with frequently than conventional banknotes.

Three days after the Euro News article was published, Market Watch disclosed an email exchange with Fadela Chaib, a spokeswoman at the WHO. Chaib was categorical in saying that the WHO had never said that cash was transmitting Covid-19:

We were misrepresented. WHO did NOT say banknotes would transmit COVID-19, nor have we issued any warnings or statements about this. We were asked if we thought banknotes could transmit COVID-19 and we said you should wash your hands after handling money, especially if handling or eating food.

The website Full Fact, a UK independent fact checker, then revealed that following The Telegraph’s original article, the WHO had been in contact with them to clarify that their advice over cash handling was not to be considered as a warning against the use of banknotes.

A few days before the UK went into lockdown, the Bank of Canada issued a press release asking retailers in the country to continue accepting cash as payment:

Refusing cash could put an undue burden on people who depend on cash as a means of payment. The Bank strongly advocates that retailers continue to accept cash to ensure Canadians can have access to the goods and services they need.

The bank also reinforced the words of the Bank of England spokesman quoted by The Telegraph in regards to the risk of transmission:

The risks posed from handling Canadian bank notes are no greater than those posed by touching other common surfaces such as doorknobs, kitchen counters and handrails. Canadians handling cash should follow the public health guidelines on COVID-19 and wash their hands as they would do for other activities.

But as we are about to find out, interventions of this nature were too late. The seeds of doubt over cash had already been planted, and the fear surrounding it was now in the process of being exploited. An early example of this was CNBC quoting Peter Gordon, the executive vice president and head of emerging payments at U.S. Bank, as saying:

I think this is an opportunity for a move to digital. I believe this crisis will accelerate and move people to utilize all forms of digital financial services.

In the same article CNBC led with how the ‘perception of cash as a vehicle for coronavirus could change how consumers choose to pay in person‘. Already we can see how Covid-19 can and will be used as an excuse to try and move the world closer to an all digital financial system.

One small method for achieving this was announced in the UK just as the country went into lockdown. The limit for contactless payments was to be raised from £30 to £45, in what This is Money reported was ‘in an effort to help customers cut down on cash usage‘ in light of fears that cash could spread the virus.

Retailers now began to take it upon themselves to compel shoppers not to use cash. At my workplace tannoy announcements were being made several times an hour encouraging customers to pay by card. Other stores like Pets at Home have gone further and banned cash payments altogether.  Social distancing measures were extended to ATM machines restricting access to cash. Bank branches cut their opening hours or closed completely. The latest example of the animosity towards cash comes from the transport firm Stagecoach, who are now only accepting exact fares with drivers unable to give change.

The impact that fear based supposition has had on cash has been catastrophic. The latest statistics and trends report published by Link illustrates the scale of damage. Consider first of all that for the week ending 23rd February the ATM transaction volume in the UK came to 42.6 million. For the week ending 12th April, the volume had dropped to 20.5 million, a collapse of 50%.

To contextualise this, in the same period for 2019 the volume of transactions averaged 51.9 million. That average for 2020 has now declined to 34 million.

Here is a brief run down of other elements to the report:

• The value of transactions as of week ending 12th April came in at £960 million. Just a month before it was at £1.9 billion, a 49% fall.

• The overall transaction volume for March 2020 was 154.9 million, a 33% fall from the 231.8 registered in March 2019.

• Transaction value for March 2020 amounted to £7.45 billion, down from the £10.2 billion reported a year earlier – a 27% decline.

The report also offers some background detail on the ATM network itself. In regards to ATM numbers, the growth of new machines remained consistent from 1998 to 2015. In 2015 the total number of ATM’s in the UK was 70,588. Then came a sudden drop off. By 2019 numbers had fallen to 60,662.

Withdrawals from 2001 to 2018 were also consistent, remaining at all times in the 2 to 3 billion range.

As for ATM availability at bank branches, the figures for December 2019 show a decline of almost 300 machines since June 2019. Pay to use ATM’s have risen by nearly 2,000 in the same period. By comparison, free ATM’s independent of bank branches have declined by over 3,000 in six months. The total number of ATM’s has fallen from 61,961 to 60,291.

At the end of March the chief executive of Link, John Howells, addressed the drop off in cash demand in an article by This is Money. It reported that because of Covid-19, Link were now anticipating that cash transactions could drop to just 10% of all payments by August 2020. This is all the more sobering when you consider that cash use had previously not been expected to drop to 10% until 2025.

According to Howells, ‘cash use is not going to come back again and resume its slow decline‘. In other words, the collapse in cash levels will become ‘the new normal‘. The severity of the situation should now be obvious to everyone.

Natalie Ceeney, the chair of the Access to Cash review, had this to say:

We were already worried about leaving parts of the population behind and the virus has accelerated that. What we mustn’t do is sleepwalk into being cashless.

With far fewer people using ATM’s out of both fear and social distancing measures, the danger now is for ATM availability to be significantly reduced. If they are not being called upon as frequently, a proportion of machines will no longer be able to operate to a profit. An added danger is that machines which do not currently charge withdrawal fees will start to do so to remain profitable.

Regular readers will be aware of articles I have published on the efforts going on behind the scenes by central banks to reform their payment systems in conjunction with advancing plans for the future introduction of central bank digital currency. One institution that is helping to coordinate these moves is the Bank for International Settlements. It is of little surprise then that at the start of April they published a bulletin titled, ‘Covid-19, cash, and the future of payments‘.

Supporting the position of the Bank of England and the Bank of Canada on the use of cash, the paper reads:

Scientists note that the probability of transmission via banknotes is low when compared with other frequently-touched objects. To date, there are no known cases of Covid-19 transmission via banknotes or coins.

The fact that the virus survives best on non-porous materials, such as plastic or stainless steel, means that debit or credit card terminals or PIN pads could transmit the virus too.

None of this now makes a blind bit of difference as I mentioned earlier. As evidenced by the numbers, the widespread fear is that handling cash could give you the virus. Successfully breaking through that belief system during a pandemic is going to gain very little traction. One thing we cannot do is rely on the media and businesses to report the facts around cash use objectively. Sensationalising fear is largely why cash levels have collapsed.

What we need to be equally concerned about is how Covid-19 is going to be used to drive the cashless agenda forward. The BIS bulletin remarks that ‘current developments bring digital payments to the fore.’ It cites payment options requiring no physical contact, such as smartphones, as ‘potential solutions‘.

But here is the real kicker, quoted in verbatim:

In the context of the current crisis, CBDC would in particular have to be designed allowing for access options for the unbanked and (contact-free) technical interfaces suitable for the whole population. The pandemic may hence put calls for CBDCs into sharper focus, highlighting the value of having access to diverse means of payments, and the need for any means of payments to be resilient against a broad range of threats.

This is yet another example of using crisis as an opportunity, which I have argued in the past is pretty much the only way global planners can enact social change. Those who have not already been captured by the banking system are now the target. The population in the UK is estimated at around 67 million. Of those, nearly 1.5 million have no bank account. This could be for a variety of reasons – from being homeless, having no fixed abode, having mental health problems or from being a vulnerable adult living in a rural area which is isolated.

On a global scale, out of 7.5 billion people, 1.7 billion are unbanked. Approaching a quarter of the world’s population. Covid-19 looks to be the crisis that globalists will attempt to use as a vehicle to digitise the assets of every man, woman and child.

Without a dramatic swing back to cash in the near term, the rights of independence from the financial system and to trade anonymously with one another will be irreversibly lost.