Cash will no longer be accepted on London buses from this summer due to the rise of contactless payment technology.
Transport for London (TfL) said a recent public consultation revealed that 99 per cent of customers already use Oyster smart-cards, contactless bank cards or prepaid or concessionary tickets.
During the consultation about a third of respondents agreed with the proposal to remove cash fares, TfL said, though about three quarters of responses to the consultation came from people who indicated that they do not themselves pay cash fares on the bus.
Leon Daniels, managing director for TfL surface transport, said: "The decision to stop accepting cash fares on London buses reflects the changing way that people pay for goods and services in our city, including journeys on the bus network.
"Paying with Oyster or a contactless payment card is not only the cheapest option, but also speeds up boarding times at bus stops and reduces delays.
"It costs £24m a year to accept cash on London's buses and by removing this option we will generate significant savings which, like all of our income, will be reinvested in improvements to the transport network."
TfL also announced a new "one more journey" feature will allow passengers with less than the single bus fare (currently £1.45), but who have a positive balance on their card, to make one more bus journey before they have to add credit to their card.
TfL said the changes will be brought in by mid-2014, once tests on the new technology have given the upgrade the green light.