As little as 7% of UK in-store transactions will be cash payments by 2024, according to a new study by Worldpay.
It comes as the growth of contactless payments has been accelerated by the pandemic and new consumer habits which have formed as a result of combating the spread of bacteria.
Nonetheless, in 2019 around 27% of payments in-store were made with cash in the UK, a number which continues to fall.
WorldPay’s Pete Wickes commented: “This research shows the speed and scale of the transformation in consumer behavior in just 12 months.
“While this opens up new opportunities for businesses to optimise and drive efficiencies, we need to be mindful that important parts of the economy continue to rely on cash, such as charity donations and restaurant tip jars, while there are many in society who remain underbanked. Fintechs and regulators need to collaborate to build new frameworks that allow for this shift and use technology to boost financial inclusion especially for those underserved communities.”
In spite of the contactless limit being raised in the UK from £45 to £100, whether the fall of cash payments will continue as we emerge from the pandemic, will likely be discovered within the coming years.
Gareth Shaw, of Which added: “If the shift away from cash is not handled carefully, there is a very serious risk that it will exclude a significant number of people who are not ready or able to take advantage of these payment methods.
“The cash network has already been severely damaged in recent years, particularly since the start of the coronavirus outbreak, because there has been no effective oversight to ensure the millions of people who still depend on it can still withdraw it. The government must move quickly with its plans to safeguard access to cash through legislation, to ensure that the system remains viable for as long as it is needed.”