Yahoo Finance Cash payments fall 15% as half of all UK transactions done on card
Just 23% of all purchases made in the UK last year involved cash, according to a new report.
Banking industry group UK Finance said on Wednesday that cash payments declined by 15% in 2019, as card payments continued to accelerate.
Card payments accounted for 51% of all transactions last year, the first time card has made up more than half of all payments.
Read more: Coronavirus marks the real beginning of the end of cash
Contactless payments rose by 16% in 2019 and the rise of card payments was also driven by an increase in online shopping. UK Finance said 48 million people shopped online last year — over 70% of the population.
The figures highlight the continued decline of cash and rise of card payments. The number of people who don’t use cash or use it just once a month has more than doubled from 3.4 million in 2017 to 7.4 million last year.
The trend is likely to accelerate in 2020 due to warnings from authorities that cash could transmit COVID-19. Card providers have also increased contactless payment limits in response to the pandemic as a safety precaution.
MasterCard (MA) said recently that 66% of all of its transactions are now contactless, while Barclaycard said on Wednesday that 90% of face-to-face purchases are now contactless.
Read more: 'Dramatic collapse' of cash could exclude millions of elderly, poor and rural people
“An increase in ways to pay coupled with the change in people’s payment habits may have inadvertently gone some way to prepare the nation for the impact of COVID-19 on their daily lives,” said Stephen Jones, the chief executive of UK Finance.
“With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store. The impact of COVID-19 may accelerate these habits for many customers.”
The decline of cash has led to warnings that poorer, elderly, and rural communities could soon be shutout of the economy. These groups depend on cash but the low usage of ATM networks is making them increasingly unviable. Many ATMs are being shut or moving to charge fees.
Read more: 1p and 2ps saved as government vows to protect cash
The government last year set up a group to safeguard access to cash for Brits following a private sector report warning the country was “sleepwalking” into a cashless society.
Natalie Ceeney CBE, who oversaw the report, said on Wednesday that the COVID-19 pandemic “has accelerated the shift to digital payments and further challenged the viability of the cash infrastructure.”
“It’s essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people’s ability to access and pay with cash,” she said.
