Cash purchases in the U.K. fell 1 percent last year, and now account for just 22 percent of purchases in the country.
Data from the British Retail Consortium (BRC) showed that there were almost 20 billion retail transactions over the year in the U.K. — that’s 54 million transactions a day, or 40,000 a minute. Most of those consumers preferred to pay with plastic, with credit cards used to pay for £277.1 billion (more than $360 billion USD) in goods last year, accounting for 76 percent of all retail sales.
As for cash, it continued to decline both as a share of retail transactions (falling 0.5 percent) and a share of retail sales (falling 1.2 percent). The BRC added that the cash decline is partly driven by more consumers using their cards for lower-value payments. UK Finance estimated that 3.4 million people hardly used cash at all during 2017, according to BBC.
However, cash isn’t disappearing anytime soon. A 2017 UK Cash Report by PYMNTS found that consumers in the U.K. still heavily rely on cash when it comes to payments. While the country’s share of cash decreased at an average of 1.54 percent per year between 2001 and 2016, it is expected that total use of cash will increase at a compound annual growth rate (CAGR) of 1.46 percent per year from 2016 to 2021.
The reports said, “Factors contributing to the decline in cash’s share in the U.K. include innovations in the mobile payments space, which” are more popular with younger consumers, as well as a boost in alternative payment methods, including contactless and digital wallets.
“Though contactless and other card-based payments have made significant inroads, cash continues to be one of the top payment methods in the U.K. With the rise of consumer credit debt in the U.K., cash promises to not only be an instrument offering store-of-value, but also a great budgeting tool,” the report concluded. “Cash will continue to face competition from alternate payment forms in the coming years, but it is well-positioned to maintain its high position with year-over-year increases in its overall volume.”