NatWest Group has experienced an increase in ‘cash resilience’ among its customer base, though the bank has still observed a decline in cash usage.
One of the UK’s ‘big four’ high-street retail banks, NatWest’s data can serve as a reasonable indicator of an overall market trend, as it is not the only high-street bank to have reported continued cash usage over the past year.
The firm’s latest data showed a continued reliance on cash ‘in certain context’, particularly within particular spending and budgeting scenarios. The data shows that 54% of ‘vulnerable individuals’ consider cash ‘essential’, an increase of 47% two years ago.
Access to cash among vulnerable groups is an issue that has caught the attention of regulators and policymakers of late. Elderly people, who are less likely to engage with digital methods, unbanked people, and those facing domestic violence, are vulnerable groups often cited as benefiting the most from cash access.
The Labour government, as part of a manifesto pledge, plans to roll out local banking hubs to maintain continued access to cash, and the Financial Conduct Authority (FCA) recently updated rules around cash access, citing the need to support vulnerable people.
Mark Brant, Chief Payments Officer at NatWest, said: “Cash remains important for many of our customers, and there’s an important job for us to support those who continue to use cash, as payments and services become increasingly digital.”
Cash still plays its part
The increasing digitisation of payments has contributed heavily to declining cash usage. Of the 2,000 people surveyed by NatWest, only 8% of adults still use cash and coins ‘all the time’.
Overall, cards and contactless remain the dominant methods, and digital means of transacting – like digital wallets, ala Apple Pay and Google Pay etc. – are taking up more and more ground.
That is not to say that cash has no priority anymore, and NatWest is not the only bank to report this. The group’s citing of budgetary and spending factors is interesting, with the same factors having been noted by Nationwide, another retail bank, earlier in the year.
Nationwide reported that the volume of cash withdrawals had risen, attributing this to people finding it easier to budget when using physical cash during the UK’s costs-of-living crisis. Data from Worldpay, meanwhile, shows that cash accounted for 10% of point-of-sale transaction values in 2023, equating to £120bn.
Speaking to Payment Expert at the time of the King Charles III banknotes coming into circulation, Worldpay General Manager – Enterprise EMEA, Pete Wickes, asserted the cash will ‘remain a mainstay in the UK’s payments ecosystem.
Moving away from budgeting, NatWest also found that some of its customers are likely to carry cash with them in case of an emergency, even though it is not their primary payment method. The bank found that 76% of its customers still carry cash for emergencies, with 48% doing so often or always.
Card outages experienced earlier this year at a range of major UK retailers, including some of its biggest supermarkets, may have contributed to this trend. Some consumers may feel that while digital and card payments are more convenient, cash provides a reliable and time-tested way of ensuring transaction needs can be met.
