Losing Contact with Cash?
Whether it is plastic, paper or metal, physical money plays a significant role in our daily lives. Yet in today’s digital age, we ask how cash is still used by you and what its future holds.
In the last year alone our money has seen a significant change in appearance and use - a new plastic-based £5 note was issued and the old version withdrawn, a similar £10 note has joined it and a new 12-sided £1 coin was introduced.
With the old £1 coin retired as of 15th October, it represents the most recent change to our wallets, one that’s also proven to be somewhat disruptive. Vending machines, prepay gas/electricity meters, lockers and more all over the country have had to adapt to the new coin as a result.
Alternative payment methods such as mobile wallets (Apple Pay, Android Pay) and contactless debit and credit cards are seeing huge growth. The latest research suggests that over half (55%) of all transactions are currently paid by methods excluding cash1. The value of these non-cash payments in the UK is expected to reach £1.44 trillion by 2026 – a 26% increase on 2016’s figures.
Much is being discussed about the future of payment, even including talk of paying with your fingertips2, but we wanted to ask how people feel about good old cash and whether our behaviour is shifting away from this societal staple.
Within our report we’re looking to answer these questions, dig deeper and hopefully get a glimpse at the future of cash in the UK.
Withdrawing cash… is it still a thing?
While we’re not expecting ATMs to fall out of use like the phone box, there is clear evidence to suggest we’re using them less and not carrying as much cash as a result.
Three in four Brits agreed they withdraw cash less often than one year ago, with 78% of women using the ATM less compared to 70% of men.
Surprisingly, nearly one third of 18-24 year olds disagreed with the statement that they withdraw cash less often than one year ago. Conversely, 82% of 25-34 year olds agree to taking out less cash, though UK Finance has found that this age group didn’t tend to withdraw much cash in the first place. More than one in 10 people aged 25-34 used notes and coins no more than once a month in 20163.
It wasn’t enough for us to know how often people now withdraw cash, however. We were keen to know why, too…
Our study also showed that over half of 55+ year olds regularly withdraw cash to make sure they have money on them, compared to only 22% of 25-34 year olds.
Regionally, the Scots are the fondest of regularly withdrawing cash with 45%, in contrast to the South East with 29%.
Security concerns over card payments have seemingly lessened in recent years, with fewer than 10% in most regions withdrawing cash due to such a concern. The most surprising anomaly here though is London, where 15% highlighted issues with card security as a reason for withdrawing cash.
Cash vs. cashless
Many of us are a little sentimental towards cash, as reaffirmed by our study, but how do day-to-day cash payments compare with card or contactless payments?
On average, our study found that Brits typically make 1.5 cash purchases per day, compared to 1.8 card and contactless payments. This provides further evidence to what has occasionally been reported, that card payments have now overtaken the use of cash in the UK.
As to be expected, 18-24 year olds lead the way with most card payments each day (2.3), yet they also have the highest average for cash payments when looking at age. All of which points to 18-24s simply spending more money than other age groups each day.
London, the North East and the South East are showing the strongest signs of losing contact with cash, with each region showing the greatest difference between cash and card purchases. The Welsh are clearly happy and see value in both, having an equal average for each.
The future of cash
So far, we’ve determined that Brits are still pretty fond of cash, using it on a semi-regular basis either through a force of habit or for times when card facilities are not in place or simply aren’t working.
You could thus safely assume that cash will always have a place in the wallet of a Brit… however, according to our research, you might be proved wrong.
When asked how Brits would feel about the UK becoming an increasingly cashless society, over half responded positively, suggesting they’d be happy with the change.
Over a third of Brits (36%) believe they live this way already, using contactless or traditional card payments whenever possible. The remaining portion who responded positively (17%) admitted a feeling of sentimentality towards cash and said they’d miss it if it were to disappear altogether.
Just over a quarter of Brits responded negatively towards the change, saying they like using cash “on occasion”, yet not claiming its dominance over alternative methods.
However, one in 10 Brits are happy to hold their hands up and admit they believe a cashless future is inevitable, even though they’d be unhappy with it.
With the ever-increasing adoption of contactless technology (the number of contactless cards in issue increased by over 25% in 2016 and contactless spending in the first half of this year equaled the whole of 20164), it is clear that Brits are in favour of this change.
Roughly four in 10 Brits believe contactless will become the dominant payment method in the near future, and 14% (mostly 18-34 year olds) reckon that we’ll eventually pay for everything with our phones or other devices, potentially rendering physical cards obsolete.
As with QR codes, 3D TVs or wireless charging before the iPhone 8, technological advances typically arrive with claims of being a fad or a phase that will die out eventually. When considering the future of cash, it is perhaps most telling that only 1% of the country believe contactless technology is one such fad and that cash will see a future boom in use.