Last year marked a comeback for payments made in cash, despite the long-running trend of decline in notes and coins payments.
Cash was used in 6.4 billion transactions made in 2022, compared to 6 billion in 2021. Part of the reason is that consumers turned to cash, to keep tabs on what they were spending at a time of high inflation pressures.
“The cost-of-living challenges meant that some people preferred to use cash to help with their budgeting,” said head of research at UK Finance, Adrian Buckle.
Overall Decline
The rise of cash in 2022 comes amid the overall decline in this form of payment over the years. More and more people choose use debit cards and other cashless forms of payment.For the first time, half of all payments in the UK last year were made using debit cards.
UK Finance said that volumes increased by 18 percent to just over 23 billion payments. This compares to 19.5 billion in 2021.
The data showed that Britons also made more payments using credit cards, which led to a 19 percent increase in this form of payments.
Mr. Buckle also noted an increase in the use of contactless, online banking and mobile payments.
The popularity of remote banking was high among adults, with 86 percent using at least one form last year. Britons extensively made use of convenient mobile wallets and contactless payments, said the report.
Younger people were more likely to use their mobile wallets to buy goods and services. Although mobile wallets still take a back seat when compared to the popularity of contactless cards, the report suggested that mobile payment methods will see strong growth in the future.
“There is a wide variety of payment methods available in the UK and each provides specific benefits to the people using them. Over the next decade we are forecasting further growth in the use of card and mobile payments and market developments such as open banking may bring further changes to the payments landscape,” said Mr. Buckle.
The total number of payments, in all forms, surged from 40.4 billion in 2021 to 45.7 billion in 2022, the data showed.
Cashless Society
UK Finance predicted that going forward, debit cards will become ever more popular. Cash usage will fall in the long run as the cost of living crisis eases.“We expect there to be around 3.3 billion cash payments in the UK in 2032, accounting for around 8 percent of all payments,” said Mr. Buckle.
This may come as bad news for consumers, who are opposed to the UK becoming a cashless society.
The survey also showed that 71 percent would support making it a legal requirement for businesses to accept cash.
People or businesses who want to withdraw or deposit cash will be able to find a bank providing the service no further than three miles away.