The use of cash may be falling again

New economics students might be starting to think about money. One form of money – cash – was in decline for some time through the 1970s, 80s until the mid 1990s. Then it staged a bit of a revival, with the amount of currency in circulation rising from around 3% of GDP in 1995 to nearer 4% now.

Yet shoppers are using cash to buy their goods less often than ever before, according to a survey by the British Retail Consortium and reported by the BBC. Online sales and contactless cards are behind the 14% fall in cash use over the past five years, while debit card use has increased by 11%.

Cash isn’t disappearing, and it still accounted for the majority of transactions - 53% in 2013, with debit cards accounting for 32%. In terms of the value of transactions, however, cards accounted for 50% of transactions.

Some recent links: What is a £20 coin worth?!

Do cashless buses signal the end for physical money? BBC radio clip

Money in the modern economy: an introduction - Quarterly Bulletin article from the Bank of England