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Just 7% of in-store purchases in the UK could be made in cash by 2024, a report has forecast, after the coronavirus pandemic fuelled the switch to cards and mobile payments.
While cash accounted for 27% of in-store transactions in 2019, the latest global payments report from processing company Worldpay found that had fallen to 13% last year. The report predicts usage will continue to drop over the next three years.
International figures showed that in several other countries, including Sweden, Canada and Australia, already less than one in 10 shop payments are made in cash.
It predicted Sweden would be “almost cashless” by 2024, with 0.4% of transactions paid for with money, down from 15.2% in 2019 and 8.8% last year.
Consumers and businesses were already moving away from cash payments before the pandemic hit, but early concerns that Covid-19 could spread via surfaces led some companies to switch to contactless methods.
The increase in the contactless limit on cards, and mobile payment services with no cap on spending have accelerated the switch away from cash. Worldpay said that by 2024 it expected mobile to make up a third of payments.
Pete Wickes of Worldpay said: “This research shows the speed and scale of the transformation in consumer behaviour in just 12 months.
“The decline in the use of cash in the UK has accelerated, and while this opens up new opportunities for businesses to optimise and drive efficiencies, we need to be mindful that important parts of the economy continue to rely on cash, such as charity donations and restaurant tip jars, while there are many in society who remain underbanked.”
Gareth Shaw, the head of money at Which?, said: “Digital payments have transformed the way many of us purchase goods and services, but if the shift away from cash is not handled carefully, there is a very serious risk that it will exclude a significant number of people who are not ready or able to take advantage of these payment methods.”