Cash is still accepted on most non-London buses, though in most places it's increasingly rare for it to be used as the older demographics who usually prefer cash get their free passes.
My local operator doesn't (or didn't, they may have changed) have card payments. It was cash, or pass (either old person's, or school children's). Several hundred pounds of cash arrived on the bus every Monday morning with all the pupils getting their weekly tickets.
For context, this is an hourly rural service (with "peak time extras" ie: buses that are school buses in all but name) between two towns. The route passes through much of the catchment area for both one on the high schools in one town, and the middle school in one of the villages (three tier school system here). Hence a large quantity of children. And I haven't started on the local-authority contract coaches yet...
Operationally, the route is interesting as the "baseline" service operates with two vehicles. The school time extras use a third vehicle, which then does two return trips during the day to give the other drivers their rest break. When I was regularly using the buses for school, there was a pool of 4 regular drivers on the route. If you didn't have the money (or not quite enough) with you for a single trip (ie: you're doing something after school, so need to use the public bus rather than the designated contract service put on) then generally the drivers would let you on. I only did this once. All the regular users had their weekly tickets, which you certainly couldn't get away with not buying! I never saw any inspector on these buses.
Anyway, I think I've slightly digressed, apologies! To somewhat loosely return to topic, I've never actually had my ticket checked by an RPI, let alone after the guard has let me do something I shouldn't, so I can't really comment. I will say that ultimately I think the final decision should be the guard's, although whether this opens up the possibility of disciplinary action for leniency etc I'm not sure.
