The Importance of Choice in Payments − speech by Victoria Cleland

Payments are essential for everyone. They are the quiet infrastructure that keeps households running, businesses trading, and economies growing. Across the world, the payments landscape is undergoing profound and rapid change. New technologies, new business models and rising expectations are reshaping how money moves across borders and within economies. At the same time, the nature of payments themselves is changing. More transactions are digital, more commerce is cross border, and there are ever more ways to pay. The landscape is becoming more interconnected, more complex, and more diverse.  

At the Bank of England (the Bank), we are interested in the entire spectrum of how many people pay and what they pay with; from physical cash, to commercial bank money, through to innovative new forms of digital money – including stablecoins and tokenised deposits. At the heart of this is the underlying infrastructure which allows these payments to settle safely. Payments are vital to the functioning of financial markets, but today I want to focus on their importance for businesses and individuals. 

The developments we are seeing today offer huge opportunities including safer, faster transactions, greater efficiency, richer data, and new ways to connect buyers and sellers. But to be impactful they need to be accessible: the payment ecosystem needs to support everyone. 

The importance of choice

And there must be choice. One of the strengths of modern payments is the wide range of options that coexist. This variety exists for a reason. Different methods suit different situations, businesses, and people. What works for a commuter tapping quickly onto a bus may not work for someone budgeting carefully in cash. What suits a small retailer may differ from what suits a large online platform. Choice allows people and businesses to pay, and to be paid, in the way that best meets their needs. Cash needs to be a part of this, and is where I will focus the majority of my remarks today at Banknote Conference, Washington. 

The Financial Conduct Authority’s Financial Lives 2024 Survey showed that 2.6 million people across the UK are heavy cash users. However, the decline in the use of cash for transactions has been steady for years in the UK – typically reducing 1-2 percentage points annually before the pandemic as digital alternatives grew. That decline accelerated sharply during the pandemic, and has since settled back into a slower, more stable pattern and in 2024 9% of total payments by volume were made using cash. Yet here, and across many countries, we see the paradox of cash: while cash is used less frequently for transactions, notes in circulation continue to grow. Cash use may continue to fall, though it is also possible that it begins to plateau. At this stage, it is difficult to know where the long‑term floor might be. But to be clear, I’m talking about a floor, not the disappearance of cash altogether.

As technology continues to evolve, new ways to pay are emerging, and some existing methods may decline. It is important that a healthy payments ecosystem continues to offer a range of options. Innovation should expand choice, not narrow it. Our collective responsibility, and here I mean the public and private sectors, is to build a system where cash, digital payments, and emerging forms of money co-exist safely and resiliently, giving every user the confidence that they can pay in the way that best meets their needs.

There are a number of ways in which the Bank is working to enable choice in payment, we are:

1. Issuing new notes to meet demand, including developing a new series, setting fitness standards and overseeing wholesale cash distribution;
2. Maintaining and strengthening RT2, the core wholesale infrastructure and platform for innovation;
3. Helping deliver the government’s ambitions for the National Payments Vision; a trusted, world-leading payments retail ecosystem delivered on next generation technology, where consumers and businesses have a choice of payment methods to meet their needs; and 
4. Assessing and adapting our infrastructure and regulatory toolkit to accommodate emerging forms of digital money, including establishing our regulatory regime for systemic payment stablecoins. And in the retail space, the Bank is exploring a digital pound, which if introduced would be like a banknote for the digital era.

Choice is a foundation for a well-functioning payments system. Choice underpins inclusion, ensuring that everyone can participate in the economy in a way that works for their circumstances. Choice strengthens resilience, giving society reliable fallbacks when unexpected events disrupt normal routines. Choice supports competition and innovation, creating the conditions for new entrants, new ideas, and better services to flourish. That makes payments choice essential for businesses and the wider economy, enabling firms of all sizes to operate efficiently, serve their customers, and adapt to changing markets. I will discuss inclusion, resilience and innovation in turn, with a particular focus on the importance of cash as part of a vibrant payments ecosystem.

Choice underpins inclusion 

We can all benefit from choice in payments. People and businesses have different needs and preferences; some value the immediacy of Faster Payments, others rely on BACS, and many use cards, phones or even watches for everyday transactions. As we move to a more diverse multi-money ecosystem, with new forms of money sitting alongside existing options, ensuring that people can choose the method that works best for them will be central to the next generation of payments.

But there remain barriers to full digital inclusion, and this is why choice is essential. The March 2026 Misconnected Report by the Connection Project underlines why payments inclusion matters. As more activity moves online, digital inclusion ensures that people are not left behind and that alternatives to cash are genuinely accessible. But that is not straightforward; people’s needs differ widely, and so do the challenges they face when making a payment.

Financial inclusion has many aspects, for example it can be shaped by, income, geography, confidence, and financial literacy. As payments become more digital, technology can expand access - from mobile banking to new tools that support budgeting, and resilience. In the UK, banks, charities and fintechs are improving accessibility, and programmes like Barclays Digital Eagles and the Connection Project help people build the skills to engage more independently with financial services.

Digital innovation can also open new doors; talking ATMs, cards with tactile features, wearable payment devices, and apps designed specifically for people with learning disabilities are already helping more people engage confidently with the financial system. These examples show what is possible when accessibility is designed in from the start. And this is certainly something to have front of mind when developing the next generation of retail payments in the UK.

And there is a big role for cash. Cash use is highest among groups who are already more vulnerable to exclusion – including digitally excluded adults, those with no qualifications, the unemployed, low-income households, and adults aged 85 and over. Surveys commissioned by the Bank found that 14% of people choose cash as their first-choice payment method, and a quarter of UK adults could not go more than a week without using it. Cash is an essential part of daily life for many, providing a simple, reliable way to budget.

Recent Bank research found nearly half (44%) of people with disabilities use cash regularly. The research highlighted how different payment methods offer distinct advantages and disadvantages for people, depending on their disability. It reminds us that cash is not simply a preference but an essential tool for accessibility, independence, and inclusion. Removing or marginalising cash risks excluding people who already face barriers in daily life. Different disabilities create different payment barriers, which innovation can directly address. Some people struggle with PINs or multi step authentication, while others find cash handling or face to face transactions difficult. Accessible design from biometric authentication to clearer interfaces, adjustable terminals and tactile or audio cues can make payments more inclusive. The environment also matters. Some people prefer self-service, others need human support; busy settings can heighten anxiety; and reduced access to branches or ATMs increases reliance on others. Smarter layouts, quieter checkout options, and more accessible cash access points help maintain confidence. 

Against this backdrop, cash remains a vital part of financial inclusion and vulnerable groups rely on it more than others. That is why we continue to invest in banknote accessibility, such as including tactile features to help people with visual impairments recognise different denominations and why we carry out rigorous user testing during the development of new notes. It’s also why we are consulting the public on the imagery of the next generation of banknotes, and why we are running research on how people with disabilities use cash today.

Choice strengthens resilience 

A system with multiple payment methods is less vulnerable to outages and cyber incidents. A resilient payments system depends on maintaining genuine diversity in how payments are made. If one payment channel fails, others must remain available. It is what ensures that people and businesses can continue to transact confidently even when individual systems come under strain.

One aspect of resilience comes from the underlying infrastructure. As the infrastructure underpinning all digital sterling payments in the UK, the resilience of RTGS is paramount. Last year, we launched a renewed RTGS service, RT2, which delivered higher resilience, broader access, wider interoperability and improved user functionality. To strengthen the resilience, we enhanced security and segregation of the system’s core components; leveraged new geographically diverse data centres; and introduced a new robust independent data source. We upgraded our monitoring capabilities, both during and outside of business hours, and introduced continuous and cross system reconciliations to improve detection of issues. And we have undertaken extensive major incident testing to recover quickly and within our risk tolerance.  

Resilience also stems from retaining access to multiple ways to pay. If other systems aren’t working as expected, cash is still there as a practical alternative. We have seen this in everyday situations, such as mobile coverage dropping or even simply your phone running out of battery. There have also been more severe cases, such as the system wide outages in Spain and Portugal in 2025. This and similar events have increased the profile of cash as a contingency. The Swedish Riksbank, for example, has advised households to hold cash at home, reflecting a wider international shift.

Diversity in payments relies on the continued strength of the cash cycle. Even as cash is used less frequently for day-to-day transactions, the underlying “plumbing” that gets cash to where it is needed, from wholesale distribution via cash centres and cash-in-transit vehicles, through to ATMs and retailers, must remain effective, resilient, and sustainable. And retailers need to accept cash.

The Bank now has powers to oversee the wholesale cash market, and to set the guardrails needed to help the cash centre network evolve to a more efficient footprint without introducing new risks. Our role is to make sure that the cash cycle continues to function smoothly, that resilience is maintained throughout the transition, and that the UK retains a robust cash infrastructure. Taken together with the UK’s Financial Conduct Authority’s new powers to protect access to cash for consumers, we can help ensure that people who rely on cash, whether occasionally or every day, can continue to do so with confidence. 

Choice drives competition and innovation 

Choice in payments is not only good for consumers, it is good for businesses and for the wider economy. When firms can accept a range of payment methods, they benefit from greater competition, which helps to lower costs and drive innovation. They gain access to faster and more efficient options, including the potential offered by programmable payments, which can reduce late payments for SMEs and streamline business processes. Greater choice also builds confidence in online shopping, supporting wider economic activity and growth. These innovations must complement existing methods, rather than just replace them.

The Bank’s role is evolving alongside the payments landscape itself and by stepping forward in this way, we want the foundations for innovation to remain robust and inclusive for the future. We are committed to ensuring that our core payments infrastructure enables the benefits of innovation to be realised. That’s why we designed RT2 as an open platform for change and innovation. Work is already underway to use RT2 to enable new ways to settle payments – such as atomic settlement – to further strengthen the resilience of this architecture. We plan to continuously enhance RT2 to meet the evolving needs of users and to enable more and more types of participants to have access to settlement in central bank money. We are extending when our service is available, with earlier opening from next year and an ambition of near 24/7. And above all, we are using experimentation to continuously assess how we can enable the next generation of innovative use cases to emerge.

Through enabling innovative capabilities in the core infrastructure, RT2 supports consumers and businesses having improved choice the payment methods that best meet their needs, supported by a central bank platform that is more flexible, more resilient, and designed for the future. This is a deliberate shift – it creates the foundations for a more open, dynamic, and competitive payments ecosystem, while maintaining the safety and robustness that underpin trust in the currency. 

We are innovating in the cash space too. Our banknotes continue to evolve to incorporate some of the most advanced security features in the world to stay one step ahead of the counterfeiters. More broadly, the Bank’s role is expanding and we now have formal oversight of the wholesale cash distribution market, giving us a clearer line of sight across the entire cash infrastructure. That means we can help ensure the system remains resilient and able to adapt as demand changes. So even as digital payments accelerate, we are modernising the cash ecosystem — strengthening security, improving resilience, and making sure cash remains a trusted, reliable option for everyone who wants to use it.

We are also working to develop a retail payments infrastructure, with choice and innovation at its heart. Through the Payments Vision Delivery Committee (PVDC), the Bank, His Majesty’s Treasury (HMT), the Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR) are delivering the Government’s ambitions in the National Payments Vision for a trusted, world leading payments ecosystem, built on next generation technology, where consumers and businesses have the choice of payment methods that meet their needs. A key desired outcome of PVDC’s strategy is ‘consumers and businesses have a greater choice of innovative and cost-effective payment options that meet their needs’.

But choice only works if those options are accessible, safe and there is interoperability between systems and between types of money. Through the Retail Payments Infrastructure Board, which I chair, we are turning this strategy into a design which will then be built by the private sector. This must be a collective endeavour; we are engaging with industry, experts, and end users on an ongoing basis and will soon be launching our first consultation on the design of the future infrastructure. This is our opportunity to modernise, to innovate, and to make sure the UK’s retail payments system stays trusted, resilient and firmly at the forefront of global best practice. At the heart of this work is choice: building a platform for retail payments that gives people and businesses more ways to pay, and ensures those choices remain reliable safe and widely available.

Conclusion

Choice in payments is essential to a system that works for everyone. We need a safe, open, and resilient environment in which innovation can thrive. By supporting a range of payment options from cash to instant digital methods and the emerging types of money, we can help to maintain trust, promote competition, and ensure that no one is left behind. A payments ecosystem offering choice is one that supports consumers, empowers businesses, and strengthens the economy as a whole.

To preserve choice, we need to keep cash relevant. That means maintaining trust in the notes themselves. Issuers need to invest in counterfeit resilience through new series of banknotes, and suppliers and manufactures need to continue to invest in developing new technology and more resilient features and more efficient and sustainable processes. We have recently announced that we are designing a new series of Bank of England notes with enhanced counterfeit resilience, and which will for the first time feature UK wildlife.

A robust wholesale distribution regime, supported by accurate forecasting of banknote demand, where we are increasingly using better data and AI, is essential to keeping the system both efficient and resilient. And we need a vibrant cash industry from cash-in-transit firms to ATM operators that can continue to deliver services efficiently and sustainably. At the Bank, we will always produce banknotes to meet demand, and we are committed to ensuring that physical cash will remain available to any and all who want to use it. And everyone in the room today and the cash industry as a whole has a role to play in keeping cash available, trusted and relevant.

I would like to thank Nina Turnbull, Camilla Pegg, Nick Mclaren, Yasuhisa Toyota and Lisa Young.