News that cash usage has mounted during a time of financial crisis shouldn’t come as a surprise according to Jonathan Vaux, Head of Propositions & Partnerships at Thredd.
The growth in cash usage in the UK was reflective by the Payments Market Report, indicating a shifting trend that had previously seen the rapid acceleration of digital payments.
Whilst contactless payments still continue to grow, an increasing number of consumers looking to budget has also elevated the prevalence of cash, according to the report. It revealed that cash payments increased to 6.4 billion payments (6 billion in 2021).
Vaux underlined that this represents the repetition of a historical trend, he stated: “The recent surge in cash usage, particularly during the ongoing cost of living crisis, is a reflection of historical patterns where customers turn to cash for budgeting and expenditure control in times of financial crisis.
“Unlike the previous major recession in 2008, we are now living in a digital payments age, where consumer digital banking solutions and mobile payment options like Apple Pay have become widespread. The fact that cash usage is rising in this digital era indicates the significance of the current economic challenges.”
He continued by emphasising that digital banks are also looking to tap into the benefits of physical cash, particularly when it comes to enabling consumers to budget.
“Many modern digital banking apps have incorporated ‘digital cash’ features that emulate the benefits of physical cash, such as better monitoring and control over spending. These features are particularly appealing to younger generations who are comfortable with mobile payment technology,” stated Vaux.
“There is still a large segment of the population that either lacks awareness or is hesitant to embrace the advantages offered by digital banking providers. In light of the current financial circumstances, this group is likely to continue relying on cash as their preferred payment method.”