Cash Payments Account for One-Fifth of Retail Transactions

Retailers report that the use of cash in stores increased for the second consecutive year, following a decade-long decline. The British Retail Consortium (BRC) stated that notes and coins were utilized in one-fifth of all transactions last year, attributing this trend to shoppers using cash as a budgeting tool. The BRC also noted a slight decrease in the average amount spent per purchase, falling from £22.43 in 2022 to £22.03 last year. These findings emerged subsequent to charities informing a parliamentary committee of MPs that various demographic groups face exclusion from vital services and community locations that have ceased accepting cash payments. The charities highlighted particular difficulties for women in abusive relationships, whose partners may exploit bank accounts for control or to monitor their activities. Deidre Cartwright, policy manager at the charity Surviving Economic Abuse, commented: “Oftentimes access to cash is their only means to actually accessing essentials for themselves and their children.” She added, “It’s a means for them to be able to escape an abuser, especially when that abuser can track them through a bank account, so it’s incredibly important for their safety and survival.” The Treasury Committee was also informed that certain older individuals and those experiencing mental health issues exhibit a greater comfort level with using cash, or lack the necessary digital proficiency or cognitive capacity to manage transactions exclusively via cards, computers, or mobile phones. Charitable organizations indicated that this exclusion extends across a broad spectrum of services and locations. Wayne Crocker, director at Mencap Cymru, provided an example: while individuals might have the option of choosing a different cafe if one in town stopped accepting cash, the situation changes if a town’s sole theatre—or a theatre situated within a university—were to become cash-free, potentially preventing some vulnerable individuals from attending. Ron Delnevo, representing the Payment Choice Alliance, identified leisure centres, parking services, and catering on public transport as examples of numerous services that might no longer accept cash. He stated: “We have some heart-rending stories from families of people with disabilities, who feel that when they don’t have cash accepted, it is robbing them of their self-esteem.” Delnevo further elaborated, “This was their money and they had the right to spend it, and they are being told their money is no good anymore. They take that as implying that they’re no good anymore.” The BRC affirmed that all major retailers remain committed to accepting cash payments within their establishments. Data released in July by UK Finance, a banking trade body, indicated that most young individuals conduct payments using smartphones or smartwatches. Specifically, nearly three-quarters (72%) of those aged 18 to 24 consistently utilized their digital wallets for contactless transactions. However, UK Finance also discovered that the proportion of individuals primarily relying on cash for their daily expenditures reached a four-year peak, attributed to the prevailing cost of living. This finding was corroborated by the most recent data from the BRC. Chris Owen, payments policy adviser for the BRC, stated: “Persistent inflation and the cost of living crisis continued to affect households across the country and many consumers used cash to budget more effectively.” The trade body advocates for regulators to implement significant measures concerning the fees imposed by card companies. Concurrently, small businesses have appealed to banks to either maintain their branch networks or ensure sufficient provisions for cash deposits. According to banking data, cash continues to be the second most frequently used payment method, surpassed only by debit cards. The Financial Conduct Authority (FCA), the City watchdog, has announced more stringent regulations aimed at ensuring banks and building societies provide access to cash. The FCA specified that its forthcoming rules will oblige banks and building societies, during deliberations over branch closures, to mitigate any resulting deficiencies in cash access through provisions like banking hubs, ATMs, and Post Office services.