Page 1: Introduction
In recent years we have seen a dramatic transformation in the way in which people in this country use money. The textbooks tell us that money is 'anything that is generally acceptable as a means of exchange'. For hundreds of years people thought of money as coins, and then notes and coins with the development of bank notes. During the twentieth century cheques became widely used as a means of payment and later plastic money in the form of credit and debit cards.
In the late twentieth century we saw another revolution in the way in which people made transactions. This change was the result of the Information and Communications Technology (ICT) revolution enabling electronic transactions to take place. A major impact of the ICT revolution has been that, increasingly, payments are made without the use of cash. Currently, over 75% of all cash in circulation is withdrawn from Automated Teller Machines (ATMs). 86% of adults in the UK hold one or more plastic cards. Debit cards are now the most heavily used non-cash payment method by individuals. Debit card payments are forecast to double over the next ten years. Increasingly people are making non-cash payments by using credit cards, via the Internet, through Interactive Digital TV and through other modern methods. For example, the chart below indicates the huge increase in customers not dealing directly with their bank.
Despite these dramatic changes, cash continues to be the most important form of money in the UK. It will be around for many years to come. The development of cash machines, or
ATMs, has been a key element in transforming the way people access their money.
Today cash machines, or ATMs, are the most popular method of withdrawing cash for most personal customers. In two billion transactions during 1999, ATMs in the UK dispensed £108 billion. Three out of every five adults use ATMs regularly, making on average 67 withdrawals during the course of the year.