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UK criminals are not abandoning cash, they are digitising the laundering chain

By James Grew, CRO, Altia

Interestingly at the weekend I paid for my son’s haircut at a local Turkish Barbers. I paid on my credit card on a machine linked to a phone. All very automated. Interestingly, the transaction was then logged on an old-fashioned paper ledger book. This got me thinking about cash, credit card transactions and paper and electronic recording.

For years, “money laundering” in the public imagination meant sacks of cash, cash-heavy fronts, and suspicious tills. That picture still exists. But in the UK today, the more accurate view is this: criminals are not moving simply from cash to digital – they are moving to hybrid laundering models.

Cash is still generated at scale. But once it enters the financial system, it is increasingly moved through bank accounts, mule networks, Faster Payments, and app-like financial services at speed.

The UK payments landscape explains why. Cash is now a minority payment method, while digital payments dominate everyday transactions. Criminals are following that same shift – not abandoning cash but embedding it into a digital laundering ecosystem.

Cash remains central to UK criminality

The National Crime Agency (NCA) assesses that money laundering impacting the UK is likely in the hundreds of billions of pounds annually, underpinning most serious and organised crime.

Despite the growth of digital payments, the NCA estimates around £12 billion in criminal cash is generated in the UK each year. This cash must still be moved, hidden, or legitimised – and that is where laundering techniques evolve.

The key point: cash is still the entry point – not the whole system.

Cash-intensive businesses still play a role

The UK’s 2025 National Risk Assessment identifies cash-intensive sectors, including barbershops, nail salons and car washes as environments where criminal cash can be introduced into the legitimate economy.

These businesses can be exploited to:

  • Inflate or falsify takings
  • Mix illicit cash with legitimate revenue
  • Provide a cover for banking activity

This does not mean such businesses are inherently suspicious. The vast majority are legitimate. But structurally, they provide a low-friction entry point for cash placement.

The real shift: digital movement after placement

Where the UK threat has evolved most significantly is after cash is placed.

The NCA’s National Economic Crime Centre highlights that modern laundering networks use a combination of cash, bank accounts, non-bank payment providers and digital assets to move funds.

Once cash is deposited, it is:

  • Split across multiple accounts
  • Transferred rapidly using Faster Payments
  • Routed through mule networks
  • Passed into alternative payment platforms or overseas channels

This creates speed, scale, and fragmentation – making detection far harder.

Post Office deposits: a clear vulnerability

The Financial Conduct Authority (FCA) has highlighted abuse of cash deposit services, particularly via the Post Office.

Estimates suggest hundreds of millions of pounds are laundered annually through this channel.

A key weakness:

  • Transaction limits (e.g. £20,000) are bypassed through repeated structured deposits

Once deposited, funds are quickly distributed across:

  • Multiple bank accounts
  • Alternative payment providers
  • Digital payment rails

This is a textbook example of the cash-to-digital laundering bridge.

Mule accounts: the backbone of digital laundering

Mule accounts are now a critical enabler.

The NCA reports:

  • Over 39,000 suspected mule accounts identified in 2022
  • Activity continuing to grow in scale and sophistication

The 2025 National Risk Assessment adds:

  • 194,000+ mule accounts offboarded by firms (2022–2023)
  • Business accounts now represent ~20% of mule activity

This is significant. It shows laundering is no longer confined to personal accounts – business infrastructure is increasingly used to move criminal funds.

Mule networks now sit at the intersection of:

  • Fraud
  • cash placement
  • digital payment flows
  • organised crime networks

Criminals follow the legitimate economy

The UK Finance reports that fraud losses exceeded £1.17 billion in 2024, with major volumes driven through digital channels.

At the same time:

  • Mobile wallets are used by over half of UK adults
  • Faster Payments continues to grow rapidly
  • Online channels drive the majority of fraud cases

Criminal behaviour mirrors consumer behaviour:

  • Faster payments → faster laundering
  • Mobile-first banking → mobile-first criminal movement
  • App ecosystems → app-enabled financial crime

Regulation is responding – but the challenge is systemic

The Payment Systems Regulator introduced mandatory APP reimbursement rules in October 2024 (up to £85,000 per claim), shifting accountability across sending and receiving institutions.

The FCA continues to tighten expectations around:

  • transaction monitoring
  • AML controls
  • cash deposit oversight

These are important steps – but they do not remove the core issue:

The laundering chain now spans multiple systems, sectors and technologies.

What investigators should do different

1. Stop separating cash and digital cases

Most modern laundering cases involve both. Treat them as one connected system.

2. Follow the full financial journey

From cash generation → placement → account movement → layering → extraction

3. Focus on networks, not transactions

Modern laundering is fragmented by design. Single transactions rarely tell the story.

4. Align fraud and AML investigations

Mule accounts and APP fraud sit at the centre of both.

The UK threat picture – in summary

The UK is not seeing a shift away from cash. It is seeing the rise of hybrid laundering, where cash is combined with fast, scalable digital movement across accounts, platforms and payment systems.

Cash still matters. But speed, fragmentation and connectivity now define how criminal money moves.

Sources

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