Use of cash plummets in UK as payments switch to cards and digital
Cash continues to lose its appeal, especially among young consumers, as payments using bank notes and coins dropped 35% last year.
According to a report by UK Finance, changes in spending habits have dramatically accelerated during the pandemic, with 13.7 million people going cashless last year – almost double the 7.4 million in 2019.
More than eight in 10 people in Britain now use contactless, with no age group or region falling below 75% usage, the report said.
By the end of 2020, around a third of Britons were registered to make payments on their phone or smartwatch, an increase of 7.4 million people on the year before.
The report said it was mostly younger shoppers using mobile payments. Just over half of 16-24 year-olds were registered for mobile payments compared to just 11% of over-65s.
Around half of over-75s preferred using cash over other payment methods, with fewer than a quarter of those aged 18-24 preferring cash over card.
Around 14 million people used cash just once a month or not at all in 2020, up from just 7.4 million in the previous year, according to the banking trade body.
Despite this, there remained 1.2 million consumers who mainly used cash for their day-to-day spending during 2020.
The overall number of consumer payments fell by 13% to £30.7bn as shoppers stayed indoors. The number of contactless payments made increased by 12% to £9.6bn.
UK Finance spokesman David Postings said: “The pandemic resulted in some marked changes in payments behaviour and while it’s too early to say whether they are permanent changes, we did see an acceleration in some existing trends such as the reduction in cash usage.”
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