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The decline of cash payments in the UK

Published 24/05/2021

The decline of cash payments in the UK

There’s no getting away from the fact that consumer spending is changing, especially in light of the coronavirus pandemic. 

Shoppers are moving away from making cash payments and instead, using debit and credit cards, contactless payments, digital wallets and virtual terminals to pay for products. 

Figures by UK Finance show that in 2017, debit cards overtook cash as the most frequently used payment method in the UK and it’s likely this trend will continue over the coming years with the rise in contactless payments and alternative digital payment methods, such as Apple and Google Pay. This is further supported by more recent data which shows debits are the most popular payment methods followed by cash.

To prove that cash is on the decline, research carried out by Accenture, shows that between 17th-25th March 2020, cash usage in the UK had declined by 50% and is expected to reach 40% across the whole of 2020 compared to 2019. Meantime figures show that ATM use in the UK will drop to around 74.2% in 2024 compared to 84.7% in 2019. This was already in decline prior to COVID-19 but is now largely down to the pandemic-related safety precautions which have slashed cash and ATM usage. 

So what are the pros and cons of adopting a cashless policy for businesses? 


1. Save time and money

While businesses have to pay a fee for each credit card transaction, they also have to pay an employee for the additional time it takes to accept cash. From counting the cash at the end of the day to making frequent trips to the bank and possibly paying deposit fees, these extra hours add up. 

2. Increase checkout efficiency

One swipe or tap of a credit card makes for a much faster transaction than the process of counting cash and giving change. Going cash-free can speed up the checkout process significantly and reduce customer queuing time.

3. Decrease risk

Keeping cash in the register leaves your business at risk of theft and robbery. Accepting electronic payments will not only improve the physical safety of both customers and your staff but also reduce cash theft. 

4. Improve accounting

Going cashless allows you to track every transaction easily and leads to more accurate accounting which increases efficiency as well as your bottom line.

5. Increase customers by offering a variety of cashless payment options

Offering as many payment methods as possible can be a huge advantage for businesses as you widen your accessibility to a greater proportion of customers. Debit cards are typically the preferred cashless purchasing method but other electronic payment methods and digital wallets such as Apple Pay or Google Pay are also increasing in popularity. 


1. Additional fees apply for credit cards 

Additional interchange fees are typically charged by the credit card issuer e.g. VISA and Mastercard as a percentage of the transaction value, these may vary, anything from 1% upwards. Remember to factor this into your workings as you decide which payment methods you’d like to offer.

2. You might lose customers

Before the coronavirus pandemic many people preferred to pay by cash for privacy or data security reasons or budgeting purposes. Some simply don’t carry cards on them.  Consumers care about comfort, control, convenience, and this includes payment systems. The more payment options you have on offer, the more customer-friendly you are. Essentially, you should now be looking to cater for customers no matter how they choose to pay while keeping your staff and your business safe. 

3. The risk of system crashes

All cashless systems are prone to unexpected downtime, if that occurs in the middle of the working day and cash is unable to be accepted as a fall-back option, this could lead to a loss in revenue.

Payment methods pre-COVID 

Prior to COVID-19 and the nationwide lockdown in early 2020,  cash usage was already on the decline, especially among the young who were opting to pay using contactless or other digital payment technologies such as Apple and Google Pay. Even those 65 and over were opting for contactless payments rather than cash. In 2018, 60% of adults in that age bracket were purchasing things that way, compared to around 50% in 2017. 

Recent stats by UK Finance, show that the number of people in the UK who are living “an almost cashless life” has more than doubled in two years, to 7.4 million 

The figures relate to 2019, prior to the coronavirus outbreak, which has since accelerated the number of contactless payments across the country. Fewer than one in four payments last year were made with cash and more than half were made by card. Almost one in seven of the population chose to live a largely cashless life in 2019. In 2018 that figure was one in 10.  Meantime, just 23% of all payments were made in cash, compared with 58% a decade earlier.

Debit cards were the most used method last year with 17 billion payments. The number of contactless payments across debit and credit cards increased by 16% to 8.6 billion.

Payment methods post-COVID

Since March, when lockdown began, consumers have developed new spending habits that are likely to last. 

Previous cash lovers are now opting to go cashless in an effort to stop the spread of COVID-19 while retailers are asking their customers who can do so, to pay with contactless or Chip and PIN. To make this easier for consumers, the limit for contactless transactions from £45 to £100 on October 15th was implemented.

In light of this, Apple Pay, Samsung Pay, Google Pay and other wallet apps are likely to experience a huge rise in people opting to pay that way. Mainly because they are easy to use and allow for quick transactions, no contact is needed and there is no contactless limit due to the two factor authentication. Although these payment options were popular with younger people prior to COVID-19, it’s likely that tokenised payments will accelerate in the UK. 

Essentially, in order to address these new needs, businesses need to develop digital capabilities and go beyond basic payment options. 

How can businesses prepare for a future without cash?

“Time to swap your coins for payment cards — safer for containing coronavirus,” Valdis Dombrovskis, the European Commission vice-president for financial services, wrote on Twitter as quarantines were imposed across Europe. 

Governments all over the world from India to Kenya to Sweden and the UK are promoting cashless payments to protect the health of the public. Fears over the transmission of coronavirus have forced shoppers to rethink how they shop and pay. Retailers are favoring clicks over cash to reduce exposure for employees.

As a business owner, your role is to understand the new behaviour of your customer, or the so-called ‘new normal’ and adapt to these changes. If you know your customers and study their buying habits, you will know the applications they use and why they use them. 

Below are the various ways you can prepare your business for the cashless world and help it run more efficiently. If you’re looking to go cashless, there are a few things to keep in mind.

  • Consider your customer base

Before committing to a cashless future, consider your customers and how they might react. Post-COVID, you’re likely to come up against less resistance than you might have a year ago.

  • Offer a range of payment options

If you’re asking customers to make digital payments, give them a choice about how they pay. Your Payment Service Provider, like Opayo, will allow your business to accept a range of payment methods be it over the phone, fact-to-face or online. 

  • Make security a priority

You should partner with a known and trusted payment service provider who offers PCI DSS compliance, therefore highlighting that you accept, store and process financial information safely and securely.

  • Don’t reject cash altogether

Most businesses who move to cashless continue to accept cash payments on a discretionary basis. If you decide to remove cash from your operations completely, you must make it clear that cash is not accepted before a transaction begins.


With COVID-19 continuing to drive concerns about cash payments, it’s vital that businesses embrace and consider a cashless future. 

Although there are challenges to navigate, by doing so, the upside is that you have complete transparency of your operations and you retain and expand your customer base. 

If you’re ready to start accepting cashless payments for your business, Opayo can assist with this. We have a range of products to allow you to go contact free.

For more information, please call us now on 0191 313 0300