The UK is fast approaching a ‘cashless’ era with 48% of the population saying they would rather not carry cash and not bother if they didn’t have to, according to research from payment processing company WorldPay.
Nearly 60% of 25-to-34-year-olds would prefer to never carry any cash with 33% of people in that age band saying they already try not to.
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WorldPay found that 24% of respondents who preferred cash over card claiming they did because they worry about card payments not being accepted everywhere. 18% said the preference was simply due to habit.
While consumers have more payment options now than in previous years cash usage as a whole is growing across the country. Sainsbury’s Bank estimates that approximately £11.4 billion was withdrawn from UK ATMs in December 2013, equating to over £367m per day.
The supermarket bank says the number of cash withdrawals increased by 3m compared to December 2012, taking the total number of withdrawals in the month to around 164m.
Small business are the most common companies that will not accept cards. Due to the high cost of having to deal with both cash and cards, small business are forced to pick one or the other and legally are required to accept cash in many countries, including the UK.
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By GlobalDataWhere cash reigns supreme is in making smaller payments with most people accepting they will still have to pay by cash for these transactions. Among those who prefer to pay by card, transactions over £4.50 ($7) would see the majority utilising card payments and seeking out places that accept them.
These results follow the rising popularity of contactless cards in Britain. The UK Card Association reported in May of this year that there were 44.7m debit cards with contactless functionality in circulation, which accounts for 47% of all debit cards, an increase of 32.4% year-on-year.
Mobile payments are slowly gaining momentum but have not reached the levels of growth or popularity of card payments. According to payment systems company Vocalink, 30% of UK adults would be interested in mobile payments if their bank provided the service. However, 50% of respondents said that they were not interested in using mobile payments at all.
Dave Hobday, managing director of WorldPay UK, said: "People aren’t going to stop carrying cash overnight. It still has its uses. But with more businesses of all kinds taking cards of all values, and with a clear preference among younger people to pay by card wherever possible, we are definitely going to see people using much less cash."
In 2013 the UK’s Payments Council predicted that the number of transactions involving cash could decline from 21bn in 2012 to 14bn by 2022. It also expects the use of credit and debit cards to rise from 10bn to 17bn transactions, driven primarily by the increasing use of online purchases, as well as contactless cards at shop counters.
