Cash will account for just 7% of in-store purchases in the UK by 2024 as the use of mobile payments and cards continue to accelerate, according to projections.
In 2019, cash made up more than a quarter (27%) of in-store payments, according to payment processing technology provider Worldpay, a brand of FIS (Fidelity Information Services).
This decreased to 13% last year as the coronavirus crisis had an impact on the way people paid.
Pete Wickes, general manager for Europe, the Middle East and Africa at Worldpay from FIS, said: “This research shows the speed and scale of the transformation in consumer behaviour in just 12 months.
“The decline in the use of cash in the UK has accelerated, and while this opens up new opportunities for businesses to optimise and drive efficiencies, we need to be mindful that important parts of the economy continue to rely on cash, such as charity donations and restaurant tip jars, while there are many in society who remain underbanked.
“Fintechs and regulators need to collaborate to build new frameworks that allow for this shift and use technology to boost financial inclusion especially for those underserved communities.”
Gareth Shaw, Which? head of money, said: “Digital payments have transformed the way many of us purchase goods and services, but if the shift away from cash is not handled carefully, there is a very serious risk that it will exclude a significant number of people who are not ready or able to take advantage of these payment methods.
“The cash network has already been severely damaged in recent years, particularly since the start of the coronavirus outbreak, because there has been no effective oversight to ensure the millions of people who still depend on it can still withdraw it.
“The Government must move quickly with its plans to safeguard access to cash through legislation, to ensure that the system remains viable for as long as it is needed.”