Research: What Has Become Of Traditional Cash?
March 01, 2023
As we have previously stated in past blogs, the popularity of cashless continues to grow. The ‘why’ is no mystery; this is truly a digital age, and our phones have quickly become a true ‘Swiss army knife’ for all aspects of life: among them, payments and managing our finances. Today we take a look at an article by the Fintech Times wherein the question is: how popular have cashless payments become?
New research conducted in the UK, and published by business comparison website BusinessComparison, gathered data from more than 2,000 adults to find out how many people still use cash.
In 2020, there were 180,147 million cashless payments overall in Europe.
The continent recorded the third-highest volume of cashless payments at the time of the data being collected, accounting for 20% of all global cashless payments.
In the UK alone, 30,914 payments were recorded in the same time period, of which 20,722 were cashless. This number translates to 67%. That’s 455.32 cashless payments per capita. At this time, the UK recorded a population of 67M people.
Of these cashless payments, debit cards were the most popular.
Cash is still in use, albeit in a much lower number than cashless, and BusinesComparison asked the question: what has become of traditional cash?
2,000 UK adults were asked about their cash habits, including where the cash was spent, and why they decided to use it instead of a cashless method.
1% of correspondents said they have never paid cash, 44% of correspondents admitted they used cash within the last week, 17% used it in the previous 2 weeks, and 13% reported having used it in the last month. The cashless correspondents were in the 18-24 age demographic, showing younger people are deviating more and more from traditional payment methods.
Being more region specific, 62% of correspondents from Wales had used cash in the last week, alongside 51% from the North West. In contrast, only 24% in the North East and 20% in Northern Ireland had used it within the last month.
The report revealed hospitality is the sector where cash is used the most. 11% of correspondents said they made use of cash in a cafe or deli, and 9% in a restaurant. Other popular spots where cash was used the most were pubs, butcher shops and fishmongers, and farmer’s markets.
But, in a digital world, why choose to use cash at all?
For many, it was a matter of necessity. Almost 30 per cent said they had used cash as they were only making a small purchase (29 per cent), with another 29 per cent saying they were using up cash they already had on them.
Other reasons include the fact that some businesses only accept cash (15%), technical difficulties that prevented cashless methods from being used at all (7%), and finally, correspondents who simply prefer cash (17%).
In recent years, we’ve seen cash payments become increasingly undesirable, whether due to inconvenience or something else. Cashless payments have quickly risen in popularity to become the most predominant form of in-person payment (…) It’s clear that savvy UK consumers understand the benefits of cashless payment methods, making it essential for businesses to cater to their preferences.
We will, of course, keep monitoring the cashless payment methods preferences as the year advances, but one thing is for sure: cash is slowly but surely losing the preferred payment method competition. As Brennan said, businesses need to cater to customers’ preferences when it comes to payments.
Want to learn more? Check out The Fintech Time’s full write-up here.
Do you still use cash? Share your thoughts on our LinkedIn page.
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