Finding the right balance: The role of cash in a digital world
The digital payment revolution has happened with breath-taking speed, and while the rise of contactless and card payments is undeniable, we know that over 2 million people still use cash for their day-to-day spending. Why do people use cash and how does this help them to manage their money? These are just two of many questions we put to consumers and micro-traders across the UK to explore this and really understand the role that cash plays in our increasingly digital world. Our findings might surprise you…
Does cash have an important role in society?
Our research found that cash plays a much more important role than many imagine - more than half (53%) of the country rely upon cash as regularly as they do card (51%). Despite the numerous benefits card payments bring, convenience is key for consumers using cash, with a quarter preferring to have a choice in how they make different payments. Convenience echoes throughout consumer conversations we’ve had on the topic, demonstrating the need for people to have continued access to cash and choice in how and when they use it.
Who is still using cash?
Despite perceptions that older consumers may be more dependent upon cash, it defies generation splits by remaining popular with a broad spectrum of the population. Surprisingly, ‘millennials’ are heavily reliant, with eight in 10 carrying cash.
Even though we’d expect ‘millennials and generation z’ to be less reliant on cash, many are still using cash on a daily basis. Again, flexibility and choice resonates with these age groups too and over a fifth use cash to keep control of spending and track outgoings. Despite the emergence of financial tracking apps, cash plays an extremely important role in how many budget and manage their money.
Do business owners still value cash?
When speaking to small business owners, specifically micro-traders, we found that these smallest businesses handle an average of £731 a week in cash. For many, cash remains one of their most commonly (59%) accepted methods of payment. The main reason why these businesses continue to accept cash is because their customers demand it. More than half (54%) do not expect to go cashless within the next 18 months because their customers want to continue paying with cash.
Micro-traders tend to visit their local bank to deposit cash on average four times a month. However, with continued bank closures across the country, over a quarter of micro-traders do not have access to a bank branch in their local community. These businesses are the lifeblood of local economies and so it’s vital that we support them by providing access to banking services and limit time away from their business in order to do so where possible.
Finding the right formula
The debate on the future of cash should not be about one form of payment replacing the other, but instead looking at how consumers balance their use of different methods alongside one another. We now know that people of all ages, and in communities across the UK, continue to rely upon the flexibility cash offers. While the closure of bank branches and the reduction in ATM networks is likely to impact vulnerable groups the most, all ages and locations will be affected. Looking forward, Post Office has an increasingly important role to play in supporting all communities across the country with access to essential cash services.