Cash represents only 6% of payments over the next decade

As budgeting sees a return to cash, most payments are now made by card or contactless
// Banknote and coin usage plunges amid surge in card and contactless payments
// Cost of living budgeting could see cash regain some popularity

More than 23 million people in the UK went almost cashless last year, turning to contactless payment and cards, according to banking body UK Finance.

He predicts that notes and coins will represent only 6% of all payments within a decade.

However, there are indications that cash is making a comeback due to the cost of living crisis, with households under pressure returning to notes and coins to help with their budget.

UK Finance said debit cards were the most widely used payment method in 2021, accounting for 48% of all payments and highlighting the continued growth in popularity of contactless cards.

The number of cash transactions fell by 1.7% last year, although it remains the second most used means, accounting for 15% of payments.

However, the number of people avoiding cash has skyrocketed in 2021. This could be because some businesses have gone card-only during the pandemic.

READ MORE: Contactless payment limit increased to £100

In 2021, 23.1 million consumers either did not use banknotes or coins, or only used them about once a month, a significant increase from the 13.7 million consumers the previous year who did not use them. hadn’t used cash. In 2018, that number was just 5.4 million people.

However, 1.1 million consumers mainly used cash for everyday purchases, although UK Finance said it expected cash usage to continue to decline.

UK Finance said almost a third of all payments in the UK were made by contactless methods in 2021, up 36% from 2020, with payment by phone also on the rise.

The report also provided insight into the growing popularity of buy now, pay later (BNPL) credit. Research from UK Finance found that 12% of people used it to buy goods last year. Young people were more likely to use the BNPL, although the group that used it the most was between 35 and 44 years old.

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