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Gloucestershire Business News

Cash isn't crashing, says finance report

It looks possible that the question "Do you take cash?" could be heard more frequently in retail this year as surprising findings from financial trend analysts UK finance suggest a revival in the popularity of commerce based on loose change and banknotes.

A new Payments Market Report from the body that represents more than 300 financial firms across the UK suggests that a gradual decline in the popularity of cash, which faced further pressure during the pandemic as consumers shunned the potential biohazard of physical transactions, is no longer the trend.

Overall, the report's chief findings were that the total number of payments increased to 45.7bn, up from 40.4bn in 2021. For the first time, data also revealed that half of all payments in the UK were made using debit cards.

However, the report added: "The number of cash payments increased to 6.4 billion payments (6.0 billion in 2021) although the proportion of payments made using cash fell slightly from 15 per cent to 14 per cent.

While this may be seen as good news among consumers who remain suspicious of any perceived reduction of the use of cash as a loss of choice (coupled with the fear of corporate control through digitsation), contactless payment hardly suffered from any resurgence in demand for cash as a popular payment choice. In fact, the number of contactless payments increased by 30 per cent to 17 billion.

UK Finance said: "Nearly a third of adults are registered for at least one mobile payment service, while 86 per cent of adults used a form of remote banking," and added it saw "Continued growth in the use of Faster Payments by both consumers and businesses."

In August, the Federation of Small Businesses (FSB) backed a "Don't Kill Cash" campaign which saw a petition of 270,000 people voice concern that cash's role in commerce could come under threat.

Alan Soady, spokesman for the FSB said: "Cash is a really important part of the payment mix and lots of small businesses still very much value taking cash."

The FSB has stated that it fears that if retailers invest in a cash-only policy they may become exposed to later price increases from banks who manage their transactions.

However many small retailers say cash can be a financial burden.

One Cotswold gift shop owner told Punchline-Gloucester.com: "It's all very well being open to cash over the counter, but it costs us time and money in staff having to go and pay in. And our town no longer has a single bank!"

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