Consumers are increasingly moving away from cash payments. UK Finance forecasts that cash will account for just 8% of all payments in 2023 compared to 14% last year, while the latest study on the payment attitudes of consumers in the euro area found that cash represented 42% of total transaction value in 2022, down from 47% in 2019.
According to the Federal Reserve’s diary of consumer payment choice report, the share of payments made using cash in the US dropped from 20% in 2021 to 18% last year.
There is nevertheless some evidence that the cost-of-living crisis has encouraged consumers to make more use of cash as a means of controlling their spending. UK Finance notes that the number of cash payments made last year increased to 6.4 billion from 6 billion in 2021 and the Federal Reserve found that on-person and store-of-value cash holdings remains above pre-pandemic levels.
The UK parliament recently asked the Financial Conduct Authority to seek to ensure reasonable provision of cash deposit and withdrawal services for personal and business current accounts in the UK.
Zennan Green, global director of thought leadership & content at cash technology solutions provider Glory Global Solutions, agrees that consumers have turned to cash to help them keep track of spending and as a budgeting tool – not just for smaller value payments, but also for purchases ranging from medicine to clothing.
