Cash Payments Fall 15% As Half Of The UK Transactions Are Made In Cashless
The 21st century has taken digitization to its peak and advanced technology is better than ever before. The revolutionary smartphone technology has brought significant changes to our lifestyle. From payments to shopping, everything is perpetrated on smartphones.
As a result, the UK economy is experiencing a significant fall in cash payments. In the latest research, it was stated that only 23% of all expenditures were made in cash in 2019.
UK Finance, a banking industry group asserted that in 2019, the cash payments slumped by 15% because card payments took a leap by up to 51%. People are choosing card payment over cash and that is resulting in poor cash flow.
2019 also saw a huge rise in contactless transactions and a 16% hike was recorded. The main reason for the hike of contactless transactions was online shopping. According to the UK Finance, in 2019 more than 70% of the population i.e., 48 million people were involved in online shopping.
The above mentioned figures clearly state the decline of cash transactions and an unusual hike of card payments. The ratio of people who prefer cashless or minimal cash transactions has relatively increased. In 2017, only 3.4 million people used card payment means, whereas in 2019, the figures doubled to 7.4 million.
This sensation is going to take a sharp turn in 2020 due to COVID 19 pandemic. The government is advising people to go cashless for safety reasons. The card providers have also increased the transaction limit for ensuring the low spread of COVID-19 disease.
Recently, MasterCard revealed that 66% of all their transactions included card payments. whereas Barclaycard confirmed that 90% of the retail shopping also includes contactless payment.
The chief executive of UK finance stated that in recent times, there is a significant growth in the payment ways and a change of payment habit resulted in preparing people for this pandemic situation. The non-acceptance of cash is leading exclusion of rural, poor, and elderly communities from the economy. This scenario has also headed for ATMs shut down and has even started additional fee charges.
Natalie Ceeney CBE recently said that it is very vital to include everyone in the economy. So, until digital payment is accessible to everyone, it is necessary to uphold cash transactions as much as it can.
And so, the world awaits for a solid strategy that would encourage people to work on cash transaction, while being safe in this pandemic situation.