ATM figures show further fall in cash reliance

Contactless payments accounted for £14.2billion in transactions in the UK in June this year, according to UK Finance.

 

Contactless payments accounted for £14.2billion in transactions in the UK in June this year, according to UK Finance.

 

That’s an increase of 66.2% on the £8.5billion spent in June 2020, and a massive 122.4% rise on the £6.4billion spent using contactless in June 2019.

 

At the same time, cash payments fell to make up only 17% of all purchases in June, a 35% decrease at the same time last year.

 

This isn’t exactly a surprise after a year of lockdowns, but it’s also a significant shift further away from cash and more towards contactless cards and digital payments.

 

And new figures released by the Government investigating the use of ATM withdrawals during the last six months has further highlighted how cash’s place in the economy is becoming less significant.

Cash withdrawals declining across the country

 

The rate at which ATM usage is decreasing is pretty similar across the whole of the country.

 

It probably comes as no surprise that the cities of London and Westminster saw the biggest decline in ATM withdrawals - which plummeted by 80.5% between April to September this year.

 

Bigger cities in the north, like Manchester and Liverpool were also high up the list, with areas like Riverside seeing a 64% decline and Manchester Central 61.45%.

 

Smaller towns remain lower on the list, with ATM withdrawals in places like St. Helens, and Knowsley decreasing by 33.4% on average.

How are cards and phones replacing cash?

 

When the COVID-19 pandemic forced the UK into lockdown, nobody could’ve anticipated what was going to happen to the payments industry.

 

Governments, retailers and industry bodies started advising customers to ditch cash in favour of safer, quicker and more hygienic payment methods.

 

Contactless fast became the most favoured payment method for consumers in the midst of the pandemic, many of whom were previously wary or unconvinced of the benefits of contactless.

 

£8.5 billion contactless payments were made in June alone last year, and it seems as though shoppers are reluctant to go back to using cash, with the amount spent using contactless rising by 66.2% in June this year. 

 

Further reports also highlight the strong growth in the number of people using their mobile phones and smart watches to make payments.

 

17.3 million adults were registered to use mobile payments by the end of 2020, which is an increase of 7.4 people compared to 2019.

 

The rise in people using contactless payment methods was significant before the pandemic though.


51% of all payments in 2019 were made with contactless and half of the adult population signed up to use mobile banking, while cash payments decreased by 15% from 2018.  

How has Covid had an impact on cash?

 

The way we shop has changed drastically over the last year.

 

When the COVID-19 pandemic forced the UK into lockdown, nobody could have anticipated what was going to happen to the payments industry.

 

The government, retailers and industry bodies started advising customers to ditch cash in favour of safer, quicker and more hygienic payment methods.

 

As the government statistics highlight, ATM withdrawals have fallen sharply and statistics from LINK show both the volume and value of cash withdrawn from ATM machines decreased significantly in 2020. 

 

In 2019, £116 million was withdrawn from ATM machines across the UK, while just £81 million was taken out in 2020.

 

While this might have been yet another impact of the COVID-19 crisis, the trend seems to be continuing well into 2021. 

 

£136 million was withdrawn in September 2021 compared to £138 million in September 2020, which fell from £211 million in September the previous year.

Are customers likely to return to using cash?

Despite its rapid decline, cash remains the second most frequently used payment method behind debit cards.

 

It’s still a massive part of our economy and 17% of all payments across the country last year were made with cash.

 

Millions of people in the UK still heavily rely on cash, especially older generations.

 

5.4 million adults relied on cash to a ‘very great or great extent’ in their everyday lives and dependency was highest among adults aged 85+.

 

42% said they relied on cash to pay for things, according to the Financial Lives 2020 survey findings.

What does this mean for my business?

 

As the government figures show, people’s reliance on cash is rapidly declining.

 

While there’s no denying covid played a massive part, it's safe to say the majority of us aren’t going to return to paying with notes and coins - with more and more of us each year turning to cards and contactless.

 

Cash will always be a huge part of our economy, so you should continue accepting it to help those who still rely on it every day.

 

It’s more important than ever though to introduce all the payment systems you need to keep up with your customers expectations and adapt your business to the changing times.

 

Being flexible will help provide your customers with a better in-store experience and encourage them to shop with you again in the future.

Future proof your business with a contactless card machine from Handepay

 

With cash withdrawals on the decline and more customers turning to contactless cards and digital payments, it’s never been more important to prepare your business for the payment types of the future.

 

If you’re looking to get a card machine for the first time, we can help you figure out which machine will be best for your business and help you get set up.

 

If you’ve already got a card machine but think you should be getting a better deal, get in touch.

 

At Handepay we’ve got a history of saving customers money when they switch to us, it’s never been easier to save money on card payments and keep more of your profits.


Get a free quote or contact us to get started.

GET A FREE QUOTE