It should come as no surprise that cash has been steadily declining in popularity over the last few years. 98 percent of adults in the UK now have debit cards, and one in six of the population have gone even further by embracing mobile payment services. One in ten describe their lifestyle as ‘largely cashless.’
The same pick ‘n’ mix approach people now take when it comes to music, television or the news is expanding into payments, as consumers take advantage of new technologies to pay in a way that suits them. – Stephen Jones, Chief Executive of UK Finance
Cash – which ten years ago accounted for 60 percent of payments in the UK – has conceded its throne to debit cards, and dropped to 28 percent of all transactions.
So, are notes and coins becoming a thing of the past?
The case for cash
According to a recent UK Finance report, cash won’t be going anywhere quite yet. They predict that the payment method will continue to decline in popularity, but will still represent around a tenth of all payments in 2028.
Despite the population’s resounding support of digital payments, an Access to Cash review estimated that 97 percent of us still carry an average of £41 with us every day. Why? 67 percent like to pay for smaller purchases with physical money, and over half say it gives them peace of mind.
There’s also a significant amount of support for keeping cash alive from a social perspective. The same Access to Cash study found that eight million UK adults would ‘struggle to cope’ in a completely cashless society. Nearly four million people live in rural areas with no access to the internet, but the hardest-hit would likely be the majority of over-55s and low-income earners that are not able to use mobile banking. The seriousness of the issue was highlighted in Philadelphia, Pennsylvania which, as of July 2019, now legally requires retailers to accept cash.
It’s unlikely that the UK will become an entirely cashless society any time soon, but this doesn’t mean that modern payment methods won’t continue to thrive.
The aforementioned UK Finance report found that while the older segment of the population weren’t quite ready to make the switch to digital, the number of over-65s that made a contactless payment rose by 50 percent between 2017 and 2018. There’s also evidence that the majority of older people and low-income earners would be interested in education sessions to get them online and using digital payment methods.
In the next decade, we probably won’t see a complete eradication of notes and coins, but a steadily increasing preference for digital payments. Amongst younger UK adults, the proportion of those living a ‘cashless’ lifestyle rises above the national average to around 17 percent, making it likely that the UK is set to hold its third-place spot for ‘most cashless’ country in the world, behind Canada and Sweden.
While the UK may not be completely cash-free in the next ten years, it’s got a population that are embracing mobile, contactless and card payments more consistently than almost anywhere else in the world. It’s never been more convenient and efficient to make a payment, but with £10 billion still being withdrawn from ATMs each month, people still want to have a choice of payment methods – no matter how old-fashioned they may be.