Cash usage in the UK is declining faster than any other major European economy, new research has found.
The use of cash is forecasted to decline by almost 40% in 2020, compared study 2019, according to the research by professional services company Accenture.
The figure is 10% higher than the European average of 30%.
The coronavirus pandemic has had a major effect on the way people pay. Withdrawals spiked at first, as people sought to stock up on cash but overall usage then significantly declined due to warnings from authorities that cash could transmit COVID-19.
Card providers also increased contactless payment limits in response to the pandemic as a safety precaution as consumers used contactless to observe social distancing measures.
As cash usage continues to decline, banks and merchants will see accelerated use of digital payments, prompting a shift in their payment revenues, according to Accenture.
Across Europe, the data shows that payment acceptance revenues are likely to shrink by as much as 14% in 2020.
However, the collapse in demand across key sectors due to the coronavirus lockdown has prompted an accelerated shift towards digital payments and online shopping. Accenture’s data showed that restaurant bookings are down almost 100% and retail footfall dropped by over 50%.
Sulabh Agarwal, global payments lead, Accenture, warned “banks must reach unbanked or unserved customers who still rely heavily on cash.”
An estimated 20% of the UK population still relies on cash, according to LINK, the UK's largest ATM cash machine network.
Agarwal said: “As retailers across the UK reopen this week, one of the key issues facing them will be how to take payment. While the decline of cash in the UK isn’t new, there’s little doubt that lockdown and social distancing measures have pushed consumers who typically rely on cash into digital payments.
“Physical checkout is now considered a risk. Use of digital wallets — such as Apple and Google Pay — are likely to accelerate as a result of this crisis, as could checkout-less store models such as Amazon Go. Both of which negate the need for cash.”