Generation Z Increasingly Favouring Cash as Payment Choice, Says Campaigner

File photo of £5, £10, £20 notes, and credit cards, dated June 23, 2023. Peter Byrne/PA Wire

Younger generations are increasingly using cash over other payment methods because it is essential for budgeting and safeguarding their privacy, Payment Choice Alliance chairman Ron Delnevo has said.

Delnevo told The Epoch Times that during the COVID-19 lockdowns, cash usage inevitably fell because most shops had shut down and people had few options other than to shop online. But that since then, cash usage has been recovering.

In December, the British Retail Consortium said cash usage had increased for the second consecutive year, accounting for one in five shop purchases in 2023.

Similarly, the Post Office said it had seen more than £1 billion in cash withdrawals in one month for the first time on record in December. Nationwide has also seen cash withdrawals from their ATMs rise for the third year in a row.

While cash usage is normally seen as a preserve of older generations, a study from ATM provider Link found that 16- to 24-year-olds showed a greater preference for cash than even Millennials. Among Generation Z, 17 percent said that cash was their preferred method of payment, compared with 13 percent of 25- to 34-year-olds and 11 percent of 35- to 44-year-olds.

Privacy Concerns

“Gen Z is definitely keen on cash,” Delnevo said, stating that part of the reason is because of the cost of living and how cash usage helps with budgeting.

However, the Payment Choice Alliance chairman also said that Generation Z—the generation more than any other to have lived their lives online—may also be turning to cash out of privacy concerns.

“Part, as well, is that people are very frightened about this whole issue of privacy—data being tracked, and so on. Maybe the younger generation are more aware of these experiences,” he said.

Link said that more than three-quarters of 16- to 24-year-olds stated the importance of being given the option to pay in cash, largely in line with the sentiment of those aged 25 to 44.

The ATM operator said that this may reflect the fact that many younger adults, including students, live on tighter budgets or have less dependable income and therefore look to cash as the best way to manage their money.

Link observed that “cash is as important, if not more important, for the youngest generation as it is for other adults.”

Public Backs Cash

Many Britons rejecting the concept of a cashless society are looking for the payment option to be protected by law.

Delnevo pointed to a Payment Choice Alliance survey conducted by YouGov in 2023, which found that 71 percent of British adults want it to be a legal requirement for businesses to accept cash.

“The public view is quite clear; they don’t want a cashless society, and they want cash to be accepted,” he said.

Customers us ATM cashpoints outside a HSBC bank branch in London on June 9, 2015. Justin Tallis/AFP via Getty Images

The payment choice campaigner added that the sentiment is “cross generational” and that “people are just generally concerned about the whole picture of having payment choice reduced.”

Cash as Resilience Measure

Delnevo gave examples of countries around the world that are rethinking their cashless society plans, including France, which has guaranteed cash acceptability, and in Sweden, where its central bank is calling for legislation to protect the status of cash.

Nations are choosing to preserve cash availability not only to support consumer choice but also to enhance national resilience against potential cyber threats, including hacks by malicious state actors or individuals targeting electronic payment systems.

“You’ve got a brilliant payment system in Sweden called Swish, but the Swedish government are well aware that that can be brought down by hackers, and if it’s brought down, they must have a backup,” Delnevo said.

Maintaining cash also acts as a back up in case of power outages, loss of internet, or—as demonstrated by the CrowdStrike incident—a flaw being unintentionally introduced into the system.

“Every country around Britain is putting laws in place,” he continued. “Why are we arguing differently in this market?”

No Plans to Mandate Cash Acceptance

Late last year, the Treasury Committee launched an inquiry into the acceptance of cash. In December, the committee heard from several experts who described the importance of cash for older people, those on lower incomes who depend on cash for budgeting, the disabled, and survivors of economic abuse.

On Tuesday, the Economic Secretary to the Treasury Emma Reynolds told the committee that the government has “no plans to regulate businesses to compel them to accept cash, big or small.”

“Businesses should have the flexibility to offer the choice in payments that they think their customers need, and we are not minded or we don’t have any plans to regulate to force business to accept cash,” she said.

People walk past branches of HSBC, Natwest, and Barclays banks in Bracknell town centre, England, on Jan. 10, 2024. Adrian Dennis/AFP via Getty Images

She stressed that the government’s payments vision must be “fit for the future,” with innovation and technology central to it.

The minister said the government’s solution to financial exclusion “is to try and tackle digital exclusion.”

She said, “We don’t have a plan to go towards a cashless society.

“Yes, we do want to ensure that we’re at the leading edge of innovation, and we do want to combat digital exclusion, but we think there is a role for cash going forward.

“Otherwise we wouldn’t have been committed to the access to cash regime and 350 banking hubs.”