A Better Way to Measure Cash

Enryo, the payment consultancy, addressed the ‘cash paradox’ in a recent piece in Finextra.

The article explained the constituent parts of cash in circulation and how the supply chain, bureaux de change, lost cash and cash stored as value are all part of cash in circulation as well as that used for transactions. It touched on cash used in the shadow economy that also plays a part in cash usage, although the extent is unclear and disputed.

Given cash in circulation has doubled in the UK since 2008, while at the same time the total number of ATMs has fallen 13%, bank and building society branches 28% and the number of cash transactions has fallen, what is going on?

This is a question asked by the House of Commons Public Accounts Committee and the Bank of England’s reply was hoarding cash and sole traders being unable to bank their cash.