An extensive new survey from The Payments Association, a trade group representing the payments industry, has shown that consumer preference for using cash is already low and likely to decline further. The Payments Association believes the UK should invest in the next stage of its payments evolution with the introduction of a Central Bank Digital Currency (CBDC). 

The survey shows that many people barely touch cash, preferring to use anything from cards to phones to newly fashionable payment rings. Many look forward to the day when digital cash replaces its paper equivalents while others worry about security and privacy. Discussions about the role of cash in society are often divisive, which is why The Payments Association made sure to include several questions on cash use in its annual Consumer Behaviour Survey. 

Only 13% of respondents across all age groups, genders and regions in the UK preferred to use cash over any other form of payment. Slightly more men preferred cash to women (15% versus 12%) and as expected cash use was significantly higher among older people: 16% for respondents aged over 55 versus only 8% for 35–44-year-old respondents. Interestingly, the youngest respondents, those aged 18-24, had similar attitudes to those of the oldest, also showing a 16% preference. This may be a result of them having comparatively less experience with buying products and services in general.  

However, while cash use is down, 88% believe that it is important for people to have cash as an option, and only 2% believe that it is not important at all. This and the fact that over four-fifths of respondents used cash within the last six months underlines the fact that despite 87% of respondents preferring other forms of payment, cash can’t be counted out.  

Tony Craddock, Director General of The Payments Association, said: “These are rather strange findings. Most people prefer not to use cash when paying for things but they want cash to be preserved just in case. It’s a little like saying, I prefer to listen through my ear pods but think we should keep Juke Boxes, just in case. But retaining both today’s and yesterday’s innovations comes at a cost to society. HM Treasury is currently consulting to find out what that cost is and whether we should mandate that cash is accepted in all retail outlets. I hope this research helps with their work.”   

Of respondents, 68% say they are unlikely to adopt a new digital payment method, though the simple fact that there are clear generational differences in payment types shows that people will adopt new types of payments if they are available. It could mean however that cash is not going away, and that there will always be a place for it in the UK’s economy, at least into the foreseeable future. This in turn means that the government would be wrong to label a future CBDC as a cash replacement – the fact that cash is still being used despite more convenient alternatives being available means that for what cash is used for it is irreplaceable. 

Cash use is significantly more preferred by respondents from lower socioeconomic groups than those from higher ones, a likely result of being more likely to be in jobs that pay in cash and being generally excluded from the financial mainstream. The unemployed were by far the group most likely to prefer cash, with 24% preferring it to other forms of payment. 

The report shows that cash is clearly still widely used: 

• 22% of respondents use cash for everyday purchases more often than once a week – again, more men than women (25% to 19%) 

• Cash users are more likely older respondents than the 25-44 cohort, and more likely to be from lower social grades (19% for ABC1 and 26% for C2DE).  

• Respondents from the northeast (36%) and Northern Ireland (37%) were much more likely to have used cash in the past week. 

• Only 6% of respondents never use cash. 

• 82% use it at least once every six months. 

Tony Craddock added: “It clearly shows that payment cards and increasingly mobile wallets are the payment type of choice for the majority of people across all demographics, but that cash is a tool for those times when paying digitally isn’t possible. This could be anything from paying small vendors who for whatever reason don’t accept cash to using cash to budget to simply being more comfortable using it. It will continue to be a useful tool even when digital currencies become mainstream, so I wouldn’t discount it just yet.” 

Riccardo Tordera, Director of Policy and Government Relations said: “It’s not surprising to see some people aren’t enthusiastic about the idea of changing the way they pay. While cash usage remains relevant, we cannot dismiss the fact that 87% of people use other forms of payments in their everyday life. Most people who use these other non-cash forms quickly adapted and see the overwhelming benefits. Few of them would have thought of adopting such forms before they were available. Data suggests the same will be the case for CBDCs, people are afraid of change, but once it comes adoption is quick to follow. It’s very likely we will see the same pattern continue with CBDCs.”