Brits Withdrawing 60% Less Cash than this Time Last Year
- 29.04.2020 10:17 am
New online research published today by LINK, the UK’s main cash machine network, shows more consumers are turning to contactless and digital payments during the Coronavirus crisis, with almost three quarters (72%) suggesting the Coronavirus will affect their future use of cash.
Over the past month, data from LINK show ATM transaction volumes, on average, have dropped around 60% compared to the same period last year. However, while use is down, consumers are increasing the average value withdrawn, up from around £65 per withdrawal to £82. Around £1billion is still being withdrawn from LINK ATMs every single week through some 11 million cash withdrawals. ATM operators are working around the clock to make sure cash machines are working and restocked with cash.
LINK has been undertaking weekly consumer research with YouGov since early March to understand how shopping habits and use of cash has changed. As much of the retail and leisure economy remains closed, the data shows the following:
- 14% consumers say they are keeping more cash at home in case of emergencies
- Three quarters (75%) of consumers said they are using less cash, with over half (58%) using cash a lot less. However, 23% of consumers said they are using the same amount or more cash.
- More than half of people (54%) say they are now avoiding using cash and using alternative payment methods.
- 76% of people say they think the Coronavirus crisis will affect their future use of cash over the next six months:
- Around half (51%) say they will use cards more
- 44% said they will use contactless/mobile payments more
- 34% said they will do more shopping online
- 31% said they will use ATMs less frequently
- 10% said they had wanted to pay in cash but that it hadn’t been accepted.
LINK’s Chief Executive, John Howells said: “The fact people are using less cash shouldn’t come as a surprise because with cafes, pubs, restaurants and some shops closed, people are travelling less and there are far fewer opportunities to spend in the first place. However, LINK ATMs are still issuing around £1 billion per week to 11 million people. Even if this crisis does lead to less cash use in the longer term, people should be reassured that LINK and its members will continue to ensure good access to all who still rely on it.”
“It’s not surprising to see that cash withdrawals have reduced by 60% compared to this time last year. Before the virus struck, stats had already shown that over half of UK consumers preferred the use of digital payments. Fears over cash potentially harbouring the virus have only accelerated this trend. The lack of choice now means the portion of the nation who favour cash will be forced to shop and bank online.
Banks will need to play a pivotal role in ensuring that the demographic of cash-first users can navigate this digital world. Firstly, they need to make sure its services can be easily accessed and used by those that depend on it the most, like the elderly. Secondly, banks will need to proactively increase their support function in guiding those that need help. At such a difficult time, customer experience will be paramount to a banks success both now and in the future. The coronavirus has forced a lot of changes to our everyday lives. I expect when we start to recover from this pandemic, that many of these changes will stick, including our continued use of digital services.”
Ian Bradbury, CTO for Financial Services, Fujitsu UK:
“It is unsurprising that the current coronavirus pandemic is speeding up the decline in cash use. Cash is a well-known carrier for disease and many businesses are now discouraging its use. But worryingly, many are not yet ready to move towards a fully cashless society, with millions of citizens across the UK still reliant on physical money. Despite this, it is likely we will see further acceleration towards payment methods that don’t require cash during the pandemic and thereafter.
“The UK payments industry has already increased the contactless spend available on cards from £30 to £45 as a direct response to the pandemic, meaning that people don’t need to use cash for most payments, nor do they risk transmission by being in direct contact with payment terminals to make a purchase. In addition, more and more government bodies are issuing aid and benefits directly through cash cards; these can be distributed to those people unable or unwilling to have a bank account, or without a fixed address – and remotely topped up as required. For more high value purchases, the use of biometrics on devices such as Face-ID & Touch-ID on Apple Pay is allowing some retailers to accept contactless payments for much higher values, such as £10,000 at Sainsburys – a very large Christmas shop!”