In the UK, cash used just 12% of all transactions in the previous year, marking a historic decline in its use. Despite this substantial decline, the number of individuals who rely mostly on cash for daily purchases has increased.
The adoption of contactless payments has been evident in the last decade, with a significant acceleration during the Covid-19 pandemic. Additionally, the cost of small retailers accepting card payments has fallen, further reducing the role of cash in everyday transactions.
According to UK Finance’s latest annual payments report, 39% of British adults, around 22.1 million people, used cash once a month or less in the past year. Jana Mackintosh, managing director of payments at UK Finance, insisted that the UK was not on track to become a cashless society. By 2033, he predicts, cash will still represent 6% of transactions.
Cash, which was the main form of payment for more than half of transactions a decade ago, has now been overtaken by debit cards, which accounted for 51% of transactions last year. Credit card usage remained relatively stable, accounting for about 10% of transactions.
By comparison, in the United States, 16% were paid, up from 31% in 2016. In the eurozone, according to the European Central Bank, 59% were the method of choice for payment – face-to-face transactions in 2022.
Contactless payment methods have increased to 60%, with 42% of British adults signing up for mobile phone contactless payments such as Apple Pay or Google Pay, a significant increase of 30% by 2022.
Also, UK financial data revealed that 1.5 million adults, representing 2.6% of the population, mainly used cash for their day-to-day expenses, although they also used electronic payments for monthly bills. This number increased sharply from 0.9 million in 2022 and is the highest since 2019.
The report suggests that those who prefer cash are mostly the poorest sections of the population and use it as a budgeting tool. However, due to the small sample size, UK Finance cautions against drawing broad conclusions from this data or confirming whether this increase in cash use is a temporary anomaly or part of a longer-term trend.
Reuters contributed to this article.
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