The Bank of England’s chief cashier, Victoria Cleland – does not use contactless payment cards.

Larry Elliott Guardian Economics editor

‘I don’t use contactless’: the woman whose name is on British banknotes

Victoria Cleland – Bank of England’s Chief Cashier

It is perhaps not entirely surprising to learn that the woman whose signature adorns Bank of England banknotes is a big fan of cash. She does not use contactless payment cards for personal spending – not least because she is yet to trust the technology completely.

Victoria Cleland, the Bank’s chief cashier, says she habitually reaches for notes and coins when she makes small purchases. But she may now be in a minority.

A Guardian investigation this week has discovered that Britain is hurtling rapidly past “peak cash”. Cash machine usage is falling, cards will eclipse cash later this year as the most popular means of transaction, and by 2026 it is estimated that just a fifth of sales will involve notes and coins.

The steady decline of cash, particularly in cities, has implications for everyone from shopkeepers to charities, schools to buskers, the homeless to the unbanked.

But in an interview in her Threadneedle Street office, Cleland, 47, says she thinks predictions of the death of cash are premature, and reveals that she has personal reservations about the security of contactless payments. 

“I personally don’t really use contactless. To be blunt, it wasn’t on my card for a long time and so I’ve just got into the habit of preferring not to. And I do hear stories of friends – this is a personal anecdote, this isn’t the official Bank view – whose money has been taken off contactless when you walk past something. And it’s only up to £45. So I use cash for lower transactions anyway and for big ones contactless wouldn’t work.”

In 2016, the latest year for which information is available, cash was used for 44% of all consumer transactions, says Cleland. That was down from 50% the previous year and from 68% a decade earlier.

“There is a slowdown in cash used for consumer transactions,” she says. “But the value of notes in circulation has been increasing year on year for the past decade or so. We are still seeing growth in total demand for cash.”

That, Cleland explains, is because people do not only use cash to spend in bars and shops. Some hold cash in case payment machines are not working. The amount of cash people keep is related to their trust in their banks. There was a noticeable spike in September 2007 when there was a run on branches of Northern Rock.

There are numerous other reasons, Cleland says, why many people prefer to stay with banknotes: “Some people like it because it is quick and easy, and you don’t need to rely on technology.

“Some people use it as a budgeting tool. Cash can be eked out if you are on a budget. Some people are worried by cybercrime and the idea that Big Brother is watching you. When you spend £10 in cash you know the transaction is complete, it is not going to get lost somewhere in the system.”

Notes are also needed to keep cash machines topped up and foreign exchange bureaus overseas stocked up for tourists planning to come to the UK. Demand increased after the Brexit referendum because overseas tourists realised they could take advantage of sterling’s decline against the major currencies.

The parallel economy – illicit transactions or people trying to avoid paying tax – is also based on cash, but figures from HM Revenue & Customs do not suggest that the amount is on the increase.

The biggest change in recent years has been the polymer note, which Cleland says is cheaper to print, lasts longer and is harder to counterfeit. She touches wood as she reveals that since the introduction of the £5 polymer note, there has not been a single incidence of forgery.

But the real test will come with the new polymer £20 notes, scheduled to be launched in 2020. The £20 note accounts for 63-64% of the value of UK notes in circulation and tends to be the forger’s preferred note of choice: big enough to make the enterprise worthwhile but not so big as to demand extra scrutiny from those being fleeced. About 80% of counterfeit notes are twenties but the amount of forgeries is small: £7.5m in 2016. “We want to keep it that low. It is important that there is confidence in the currency,” says Cleland.

So what is it like to have your signature on the notes? “I get a kick out of it. It’s exciting. The novelty hasn’t worn off. It is an amazing honour to sign notes on behalf of the country.”

The first banknote was, she thinks, produced in 1694, the year the Bank of England was founded. They were bigger than notes today, all were handwritten and could be of any denomination. The first forgeries appeared within six months, resulting in watermarks being introduced as security devices.

Britannia was on the notes from the start, although it was not until 1970 that Shakespeare became the first historical character to be featured. “People really care about notes. They take pride in them,” says Cleland.

There are 2.7 million people who are completely reliant on cash, a slight increase on previous years. Four out of five Britons say they could not imagine a cashless society and Cleland – perhaps unsurprisingly – is one of them.

“Cash is definitely here to stay. That’s why it is important that we in the cash industry invest in it, even though transaction demand is going to slow down.”