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UK Attitudes Towards a Cashless Society Consumer Report 2023

UK Attitudes Towards a Cashless Society Consumer Report 2023

Market Intelligence Reports Financial Services Consumer Attitudes UK

Mintel’s UK Attitudes towards a Cashless Society Market Report 2023 examines the key issues surrounding a potential transition towards a cashless society. Our full report is packed with analysis of consumer attitudes, consumer payment patterns, and innovations in payment methods.

Below, we’ve handpicked the key insights analysed in the full report and summarised the core topics.

Key Issues Covered in this Report

Innovations in payment methods.
Consumer payment method frequencies.
Where consumers are using cash and mobile payments.
Perceptions of a cashless society.
Preferred payment options in a cashless society.
Consumer attitudes towards a cashless society.

UK Consumer Payment Preferences

UK consumer payment trends: The most common payment method in the UK is debit cards, which nearly two thirds of Brits use on a weekly basis. However, cash remains an important option for over half of consumers.
UK consumer payment behaviour: Supermarkets are the most common place where consumers have paid in cash in the last year to 2022, despite a rise in payment innovations.
Attitudes towards a cashless society: UK consumers are feeling more negative than positive about a potential cashless society, with almost three-quarters agreeing that it would discriminate against vulnerable people.

Cashless Payments – Issues and Innovations

Banks need to boost education and accessibility

Although there are many positives to a cashless society, it is vital that no one is left behind. As innovations such as checkout-less stores become more commonplace, there is a risk of alienating older consumers unless an effort is made to boost digital confidence. Government awareness campaigns will be important to boost consumer understanding and show people the benefits of moving away from cash.

Virtual cards can reduce costs and waste

The vast majority of cards in issue are now contactless, adding speed and convenience to in-store transactions. Virtual cards are playing a key role in driving the use of smartphone and smartwatch payments, with further opportunity for innovation with payment rings and even smart clothing.

Purchase our full UK Attitudes Towards a Cashless Society Market Report to learn how to connect with your audience and respond to changing consumer demands.

Expert Insights from a Finance Industry Analyst

This report, written by Adrian Reynolds, a leading Financial Services analyst, delivers in-depth commentary and analysis to highlight current attitudes towards a cashless society.

Although cash use declined during the pandemic, the cost of living crisis has seen some consumers return to cash to improve budgeting. Over half of consumers still use cash on a weekly basis and people will want choice in their payment options. Despite increasing use of mobile wallets and the continued innovation of digital payment methods, the transition to a cashless society will be slow. Consumers will need reassurances over privacy and that moving away from cash will not discriminate against vulnerable people.

Adrian Reynolds
Principal Analyst – Financial Services

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Overview
- Key issues covered in this Report
Executive Summary
- The market
- Cash remains a key payment method but will decline long-term
  - Figure 1: Payment volumes, by payment type, 2015-21
- Contactless payments grew significantly during the pandemic
  - Figure 2: Contactless payments, 2015-21
- Bank branch closures risk reducing access to cash
  - Figure 3: Number of bank and Building society branches in the UK, 2016-22
- Free to use cash machine numbers have declined for five years
  - Figure 4: Cash machine numbers, 2010-22
- The consumer
- Debit cards lead the way but cash remains vital
  - Figure 5: Payment method frequencies, 2023
- Payment choice is vital in supermarkets
  - Figure 6: Type of payments made with cash, 2023
- Brits are yet to be convinced of the benefits of a cashless society
  - Figure 7: Cashless society sentiment, 2023
- Speed remains the key benefit of a cashless society
  - Figure 8: Perceived benefits of a cashless society, 2022-23
- Older consumers are concerned about the reliance on technology
  - Figure 9: Perceived drawbacks of a cashless society, 2022-23
- Physical cards would remain the most used payment method in a cashless society
  - Figure 10: Payment methods in a cashless society, 2023
- Most consumers value cash and do not foresee a cashless society
  - Figure 11: Attitudes towards cash and a cashless society, 2023
Issues and Insights
- The transition to a cashless society will be extremely slow
- Government and banks must boost education and accessibility
- Biometrics must prove benefits for consumers to trade privacy
Market Background
- Cash remains a key payment method but will decline long-term
- Debit card payments gain traction
- Faster payments continue to expand
  - Figure 12: Payment volumes, by payment type, 2015-21
- Open Banking is providing new payment opportunities
- Contactless payments grew significantly during the pandemic
  - Figure 13: Contactless payments, 2015-21
- Bank branch closures risk reducing access to cash
  - Figure 14: Number of bank and Building society branches in the UK, 2016-22
- Free to use cash machine numbers have declined for five years in a row
  - Figure 15: Cash machine numbers, 2010-22
- Digital currency will require regulation to become a viable payment option
  - Figure 16: Use of cryptocurrency, 2023
Market Drivers
- Inflation begins to fall but will remain high over 2023
  - Figure 17: CPI and CPIH, 12-month rates, 2016-23
- Rising base rate could make some payment methods more expensive
  - Figure 18: Bank of England base rate, end of month, 2017-2023
- Low financial confidence could see more turning to cash
  - Figure 19: Financial confidence for the year ahead, 2021-23
Regulatory and Legislative Changes
- New legislation expected to protect access to cash
- FCA updates guidance for branch closures
- Government and regulators look to support growth of Open Banking
- Open Banking adoption could benefit as FCA drops the 90-day rule
- Regulation of the BNPL sector is on the horizon
- Cryptocurrency remains unregulated
- Bank of England explores possibility of a CBDC
Competitive Strategies and Launch Activity
- Shared bank hubs look to retain consumer access to cash services
- Banks launch Cash Access UK
- Parking machines continue to move way from cash payments
- Barclays launches cashback service without the need for purchase
- Apple’s Tap to Pay brings contactless payments to businesses
- Mastercard launches Consumer Fraud Risk technology in the UK
- Familiarity with mobile wallets increases opportunity for payment rings
- Checkoutless payments can create a seamless shopping experience
- Amazon expands rollout of palm payments
- London cafe becomes the first to offer cryptocurrency payments
Payment Method Frequencies
- Debit cards lead the way but cash remains vital
  - Figure 20: Payment method frequencies, 2023
- Younger Brits are active cash users
  - Figure 21: Frequency of cash use, by age, 2023
- Credit card payments play a big role amongst older demographics
  - Figure 22: Frequency of credit/charge card use, by age, 2023
- Mobile wallets are the second most common payment method for young Brits
  - Figure 23: Frequency of mobile wallet use, by age, 2023
- Ability to spread cost is driving BNPL amongst younger demographics
  - Figure 24: Frequency of buy now, pay later use, by age, 2023
Payment Types
- Payment choice is vital in supermarkets
- Young Brits are far more likely to use cash in restaurants
  - Figure 25: Type of payments made with cash, 2023
- Popularity of mobile wallets can drive use of digital loyalty schemes
  - Figure 26: Type of payments made with mobile wallets, 2023
Perceptions of a Cashless Society
- Brits are yet to be convinced of the benefits of a cashless society
  - Figure 27: Cashless society sentiment, 2023
- Younger consumers are more positively disposed to a cashless society
  - Figure 28: Cashless society sentiment, by age, 2023
- Speed remains the key benefit of a cashless society
- Younger Brits are positive about the ease of checking transactions
  - Figure 29: Perceived benefits of a cashless society, 2022-23
Perceived Drawbacks of a Cashless Society
- Older consumers are concerned about the reliance on technology
  - Figure 30: Perceived drawbacks of a cashless society, 2022-23
- Data security and privacy will remain concerns
- The shift away from cash could distort perceptions of value
Payment Methods in a Cashless Society
- Physical cards would remain the most used payment method in a cashless society
- In-store biometric payments could feel a step too far
  - Figure 31: Payment methods in a cashless society, 2023
- Device payments will lead the way for young consumers in a cashless society
  - Figure 32: Payment methods in a cashless society, by age, 2023
Attitudes towards Digital Currency
- There is consumer scepticism over digital currencies
  - Figure 33: Attitudes towards digital currency, 2023
- Cryptocurrency will require regulation to become a viable payment method
  - Figure 34: Attitudes towards cryptocurrency, by age, 2023
- Younger Brits support a CBDC but are likely to prefer existing cryptocurrencies
  - Figure 35: Attitudes towards the digital pound, by age, 2023
Attitudes towards Cash and a Cashless Society
- Consumers want to keep cash as a safety net
- Branch closures leave many feeling pushed towards a cashless society
  - Figure 36: Attitudes towards cash and a cashless society, 2023
- Most consumers value cash and do not foresee a cashless society
  - Figure 37: Attitudes towards long-term cash use, by age, 2023
- Offer virtual cards to reduce costs and waste
  - Figure 38: Attitudes towards virtual cards, by age, 2023
Consumer Segmentation
- Digital enthusiasts
- Cash supporters
- Ambivalent individuals
- Cash sceptics
- - Figure 39: Cluster analysis of consumer attitudes towards cash and a cashless society, 2023
- - Figure 40: Cluster analysis of consumer attitudes towards cash and a cashless society, by age, 2023
Appendix – Data Sources, Abbreviations and Supporting Information
- Abbreviations
- Consumer research methodology
- Cluster Analysis

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