UK steers clear of cash during pandemic, choosing Covid-friendly contactless
The pandemic has accelerated the decline of cash, as new analysis reveals that the number of UK consumers paying with cash plummeted 35 per cent in 2020.
Amid coronavirus restrictions to reduce contact between people, the number of UK payments made using cash plummeted by 35 per cent in 2020 compared with the previous year, according to UK Finance’s latest annual payments data.
Meanwhile, more than one in four (27 per cent) of all payments in the UK were contactless in 2020, with 83 per cent of British consumers now using contactless payments. This increase coincided with the government’s increase of the contactless spending limit to £45 last April.
The new data also showed strong growth in the number of consumers using mobile or smart watches to make payments: nearly a third (17.3 million people) of the UK adult population were registered to use mobile payments by the end of 2020, an increase of 7.4 million people compared to 2019.
But it was “too early to say” whether these figures signify a permanent change in consumer behaviour, UK Finance said.
Fears surrounding the possibility of spreading the virus through notes and coins have caused a number of businesses to no longer accept cash during the last year. Moves like this were reflected in the new data, where the number of consumers who said they used cash only once a month or not at all almost doubled in 2020, rising to 13.7m from 7.4m in pre-pandemic 2019.
UK Finance’s report echoes data released by Nationwide building society last year, in which one in five people confessed to having cleaned notes and coins because of concerns around coronavirus, with 58 per cent using antibacterial wipes.
Despite the widespread adoption of contactless payments, cash remains the second most frequently used payment method in the UK, however, accounting for just under one-fifth of total payments.
“The pandemic resulted in some marked changes in payments behaviour and while it’s too early to say whether they are permanent changes, we did see an acceleration in some existing trends,” said UK Finance chief executive David Postings.
“There remains real diversity in the way in which people choose to conduct their day-to-day spending,” he added.