Cash-handling experts Volumatic have come out in support of a recent Bank of England report which states cash continues to be the key payment method for one in five people in the UK, and that 1.1 million people rely on cash for their everyday spending. Cash is still an important backup choice for those who do not use it each day.
With ongoing media speculation and misinformation being spread about the demise of cash for many years now, the latest Quarterly Bulletin published by the Bank of England shows that following the fall in usage during the pandemic, there has been a sustained recovery in cash usage since the UK came out of lockdown and that the UK is definitely not "going cashless" anytime soon.
While Covid has had a lasting impact on payment habits, with many shifting towards digital payment methods, this latest data has found that cash use has proved resilient over the last two years, with both a recovery in the transactional use of cash and the value of banknotes in circulation now being close to their highest ever level. It also found that up to 60 per cent of the population is now holding more cash as a store of value – or what some people would call saving for a rainy day.
Mike Severs
“As cash-handling experts, we have joined forces with many industry experts over the years, including the Bank of England, and this latest data from them is extremely interesting and echoes what our own research found this year at our Cash 2030 conference," said Volumatic Sales & Marketing Director, Mike Severs.
“Cash is seeing a real resurgence and is here to stay, so businesses need to take note and give customers the choice to pay by cash if they want to, especially as the festive season is approaching and more consumers are turning to cash to help them budget during these difficult economic times, we find ourselves in. Cash isn’t the enemy or dirty – it will boost profits and can be quickly and easily processed with a little help from our intelligent cash handling solutions.”
In January 2022, an estimated 73 per cent of consumers said they use cash, up from only 50 per cent in mid-2020. There has also been a recovery in cash withdrawals, noted not only highlighted by a report from The Post Office last month, but also in recent ATM figures, which after falling by around 55 per cent during the pandemic, had recovered by nearly 75 per cent in Jun 2022.
Cash resurgence
The resurgence in cash usage has been fuelled by an increase in consumer opportunities to spend in-store as restrictions eased, together with a decrease in online spending since the pandemic. There are fewer concerns over cash transmitting Covid infections following confirmation by the WHO that cash poses no greater hygiene risk than any other form of payment. More retailers are now accepting cash again – as well as no longer actively encouraging contactless payments.
In July 2022, a new legislation was introduced to protect cash and to ensure people could have access to withdraw and deposit money within a reasonable distance from their home. This has resulted in banks, building societies and the Post Office working together to offer solutions to more communities that require better access to cash.
“Access to cash is starting to improve just in time as the cost-of-living crisis has prompted more people to use cash to help them budget,” said Severs.
Research by the Financial Conduct Authority has found that 80 per cent of small-medium size companies believe they are highly likely to be accepting cash for at least the next five years, which shows they still consider cash a relevant form of payment and that their customers still want to use it.
This means that in preparation for the festive season ahead, businesses should not only be accepting cash payments, but also looking to invest in effective solutions to help them process cash more efficiently and lower their cash handling costs – especially as card transaction fees look set to continue to rise.
“With cash usage now having stabilised and showing good signs of recovery following Covid, it’s vitally important for all businesses to be taking consumer demand seriously and accepting cash,” added Severs.
