Cash is widely framed by central banks as a critical redundancy in national payment ecosystems — a safeguard in the event of digital system failure, cyberattack, or widespread infrastructure disruption. This view makes an important assumption, that the cash cycle is itself resilient. This paper discusses whether this assumption is fair, and argues that the financial and operational fragility of cash-in-transit (CIT) operators and other market participants represents a significant and under-recognised systemic risk — one that threatens the viability of cash as a redundancy in practice, even if it remains viable in theory.

Cash-in-transit is the plumbing of the cash cycle. It is often not seen, it is there to do its job, but when things go wrong, it can get very messy, very quickly. In most countries, the CIT sector is highly concentrated, typically with only a few main providers of CIT services. The customer base for CIT operators is also often relatively concentrated, made up of the major banks and major retailers. This creates a tension around price-competitiveness to win a small number of large contracts, along with shrinking activity levels forcing the unit cost of services up. Recent events in Australia should act as a bellwether, warning regulators globally of the potential risks in their respective national cash systems.

This paper applies a systemic risk and scenario analysis lens to assess what happens when these operators fail, scale back, or are no longer economically viable. We outline plausible risk pathways: from the insolvency of a major CIT operator, to regional breakdowns in cash recirculation, to knock-on effects for ATM availability and retailer cash access. These scenarios highlight the growing disconnect between policy assumptions of redundancy and the operational fragility of the infrastructure that underpins it.

In response, the paper calls for urgent recalibration of policy and regulatory frameworks — including the designation of CIT providers as critical infrastructure, clear understanding of the economics that drive the cash cycle, the need for coordinated funding or utility-style models, and resilience stress-testing. Without intervention, the very infrastructure meant to provide payment resilience may become a point of failure in future crises.