Yahoo Finance 11.6 billion transactions in the UK to shift away from cash by 2023
Cash transactions are expected to rapidly decline in the UK, with Accenture (ACN) predicting 11.6 billion transactions, worth up to £155bn ($206bn), will shift from cash to cards and digital payments by 2023.
Globally, the figure is expected to hit £5tn.
Accenture’s study noted that while cash usage has been on a downward trend in the UK, the impact of COVID-19 has been significant, as consumers avoid in-person payments during lockdown and turn to online shopping and mobile wallets.
Cash usage in the UK is projected to decline by 38% this year alone, the steepest decline across Europe.
By 2030, over 50 billion transactions in the UK worth up to £484bn are expected to move away from cash, with the UK having the highest volume increase amongst its European peers.
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Sulabh Agarwal, global payments lead at Accenture, said: “With the UK seeing the steepest decline in cash usage across Europe, COVID-19 has dramatically accelerated the shift to digital payments at a pace banks could not have predicted.
“The ongoing impact of the pandemic, acutely felt through the second national lockdown, will further entrench lasting shifts in consumer behaviour when it comes to how they shop and pay for products.”
The research from Accenture also includes a survey of payments executives at banks globally. It showed that the rapid move to digital payments has put additional pressure on banks, with three-quarters (75%) of respondents saying the pandemic has increased the urgency of their plans to modernise payment systems.
Despite notable pressure from fintechs in the UK, the survey also finds three quarters (75%) of banks see payments modernisation as being driven by national payments infrastructure changes and regulation.
Agarwal pointed out that “amid these rapid changes, retaining optionality is still key – the industry as a whole must still look to preserve access to cash for those unbanked or unserved customers who rely primary on cash.”
The UK has also seen a rise in popularity of online-only banks like Monzo and Starling.
A recent report cited a UK survey of 2,000 people conducted in January this year. Some 41% said they were moving to digital-only bank accounts because of convenience.
Around 39% said they were doing so because digital banks offer better rates, and 28% said it was because of the ability to conduct free transactions when traveling.
These banks have also been helped by the pandemic: UK authorities have encouraged citizens to turn to digital banking so that transactions can be made without physical interaction, the report said.
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