Cash payments are making a surprising comeback in the UK, with an increase in the use of notes and coins for the first time in ten years, according to recent data.
While cash usage has been on a decline, the rising cost of living crisis has prompted many individuals to turn to physical money as a way to better manage their budgets.
Additionally, there has been a significant increase in the total number of payments made using various methods, which can be attributed to people making more frequent visits to supermarkets and actively seeking better value by shopping around instead of completing one large grocery shop.
In its annual report on the UK payments market, the banking trade body UK Finance highlights that plastic still dominates in 2022. Half of all payments in the UK were made using debit cards, and contactless payments saw a 30% increase, reaching a total of 17 billion.
The total number of payments across all methods rose to 45.7 billion, up from 40.4 billion in 2021 and £35.6 billion in 2020. UK Finance links this growth to changes in travel habits resulting from hybrid working, with individuals now paying for individual journeys rather than purchasing season tickets.
However, the most noteworthy finding is the revival of notes and coins. Cash payments experienced a 7% increase last year, reaching 6.4 billion payments, despite the growing number of businesses adopting card-only policies.
The number of people living “largely cashless lives” (either not using cash at all or only using it once a month) had been steadily increasing over the years, reaching 23.1 million in 2021. However, in 2022, this trend reversed, with the number of cashless individuals decreasing to 21.6 million.
“Growing concerns about inflation and the rising cost of living have led to increased cash usage as a budget management tool,” said a spokesperson from UK Finance.
The report also adjusted its projections for the decline of cash. Previously, it predicted that by 2031, there would be fewer than 3 billion cash payments in the UK, accounting for approximately 6% of all payments. However, the latest forecast estimates around 3.3 billion cash payments in 2032, representing about 7% of the total.
after newsletter promotion
The data also suggests that the growth of buy now, pay later (BNPL) credit may be reaching a plateau in the UK. BNPL allows shoppers to divide payments for purchases, including clothing and essentials. In 2022, approximately 12% of UK consumers reported using BNPL, the same proportion as in 2021.
Interestingly, the use of BNPL among individuals aged 65 and older increased from 4% in 2021 to 8% in 2022.
Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
