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Use of physical cash one for the up for first time in at least a decade Business News

The use of physical cash has increased for the first time in at least a decade, as households return to using coins and banknotes to manage their finances in the cost-of-living crisis.

Across the UK, cash accounted for 19 per cent of transactions in 2022, according to the British Retail Consortium (BRC) – up from 15 per cent in 2021.

It is the first time since the BRC’s annual Payments Survey reports started in 2013 that it has seen a year-on-year increase in cash usage.

“Faced with rising living costs, cash was a useful tool for some people to manage their finances and track their day-to-day spending,” the report said.

Also reflecting spending pressures, consumers began making smaller but more frequent payments last year as they sought to manage their budgets.

The number of transactions increased from 17.2 billion in 2021 to 19.6 billion in 2022, and the average transaction value fell from £24.49 to £22.43, as consumers shopped around.

The rebound of physical cash also reflects a natural return to coins and banknotes following the abrupt move to contactless during the coronavirus pandemic, the report said.

However, cash usage remains well below 2020 levels, when it accounted for 30 per cent of all transactions.

Card payments fell to 76 per cent of all transactions in 2022, down from 82 per cent the previous year

( Dominic Lipinski/PA)

This led the BRC to note that, “whilst a small percentage of people have returned to pre-pandemic habits, for a large portion of the population, the pandemic has had a lasting impact on how much we transact in cash”.

The trade association also said the recovery in cash use in retail settings was “fairly minimal”, with “only a relatively small increase as a share of total sales by value” – up from 8.2 per cent in 2021 to 11 per cent in 2022.

Card payments were used for 76 per cent of transactions in 2022, down from 82 per cent in 2021 – with debit cards accounting for around four in five of these transactions.

Alternative payment methods increased in popularity in 2022, from 2 per cent of transactions in 2021 to 5 per cent in 2022. This category includes options such as buy now, pay later.

Hannah Regan, payments policy adviser at the BRC said: “We are now seeing a return to many of the pre-pandemic trends in payments, including smaller but more frequent purchases, and a slight return of cash payments.”

Additional reporting by PA

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Source: www.independent.co.uk
This notice was published: 2023-12-07 08:57:33

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