Finance experts published their findings about the future of cash in the Access to Cash Review, saying cash could crash out of use as early as 2026.
Card payment methods – driven by contactless – have been increasing in recent years, with the method overtaking cash payments for the first time in 2017.
The experts said cash would be used in 15 years’ time, but would account for no more than 15% of transactions.
Cost to businesses
Cash’s decline is being driven by the cost to businesses handling it, including accounting time and the need to have it transferred to banks using, sometimes, costly methods.
Driving the use of cash down is the increased acceptability of cards; bricks and mortar businesses stopping accepting cash; the rise of online shopping; increased take up of card and app use on public transport; better broadband coverage; and innovations in digital payment technology, said the report.
However, frequency could be increased by consumers losing faith in payment technology, due to failures; increased concern over privacy; negative interest rates; and a major economic crisis.
Finally, the report said: “Even among those who regularly use digital payments, most people still carry cash and want the choice to keep doing so.”
Cash is just what we’re used to
It continued: “Some say it’s because cash is just what we’re used to – that if you’d asked people if they wanted to keep the horse and cart before cars were invented, they’d have said ‘yes’.
“There’s plenty of science to suggest we don’t like giving up something we’ve already got – particularly if the alternative isn’t clear – and that we’re predisposed to want choice.
“However, it’s a mistake to think the need for cash is limited to those who don’t want to move with the times.”
It added tactile cash still remained important to lots of consumers for gifting and budgeting.