'Due to COVID-19' Last Year UK Cash Payments Plummeted 35%

[Photo by Reuters-Yonhap News]

[Asia Economy Reporter Park Byung-hee] Major foreign media reported on the 16th (local time) that the volume of cash payments in the UK sharply declined by 35% last year compared to 2019 due to COVID-19.

UK Finance, which compiled the related statistics, explained that cash usage had been decreasing by about 15% annually since 2017, but this trend accelerated last year. They noted that due to the impact of COVID-19, cash usage decreased while contactless payments, online transactions, and the use of mobile wallet applications increased. UK Finance is an organization established in July 2017 through the integration of the British Bankers' Association (BBA), the Mortgage Bankers Association, and the UK Cards Association, with nearly 300 UK banks and financial companies as members.

As cash usage declined and contactless payments increased, the number of retailers in the UK that do not accept cash has grown. According to a survey released last month by a consumer group, one-third of UK consumers reported having experienced being unable to pay with cash when purchasing goods.

According to UK Finance's data, as of last year, approximately 1.2 million consumers primarily used cash for daily payments. In contrast, 1.37 million consumers rarely used cash, a larger number. The number of consumers who rarely use cash nearly doubled compared to 2019.

UK Finance CEO Davis Postings said, "The COVID-19 pandemic appears to have brought about notable changes in payment behaviors." However, he added, "It is still too early to conclude that payment behaviors have completely changed." He also emphasized, "Banks and financial companies are helping customers to make payments in various ways."

The proportion of contactless payments last year was recorded at 27%, nearly four times higher than 7% in 2017.

The total payment volume decreased for the first time in six years, down 11% compared to 2019. This is interpreted as a result of the necessity to reduce spending due to COVID-19. Credit card payments decreased by 18%, and debit card payments by 7%. UK Finance explained that credit card payments, which are often used for expensive leisure activities such as performances and travel, significantly declined because people could not enjoy travel or performances due to COVID-19.

It was confirmed that nearly one-third of all adults, about 17.3 million people, are registered members capable of mobile payments. This number increased by 75% compared to 2019. Among young people aged 16 to 24, the rate was even higher, exceeding half.