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For the first time in at least ten years, there has been a rise in the use of physical currency, as households turn to coins and bills to handle their finances during the current financial difficulties.
In the United Kingdom, cash was used for 19 percent of transactions in 2022, as reported by the British Retail Consortium (BRC). This is an increase from 15 percent in 2021.
This is the initial instance in which the BRC’s yearly Payments Survey records have shown a rise in cash transactions compared to the previous year, starting in 2013.
According to the report, as living expenses continue to increase, cash has proven to be a beneficial resource for individuals looking to effectively manage their finances and monitor their daily expenditures.
In addition to financial strain, individuals started paying smaller amounts more frequently in the previous year in order to better control their expenses.
The total number of transactions rose from 17.2 billion in 2021 to 19.6 billion in 2022, while the average value of each transaction decreased from £24.49 to £22.43 due to consumer price comparisons.
According to the report, the resurgence of physical money is a result of people naturally reverting back to using coins and bills after the sudden shift to contactless payments during the COVID-19 outbreak.
Nevertheless, the utilization of cash continues to be significantly lower compared to 2020, where it comprised 30% of total transactions.
The BRC observed that while a few individuals have resumed their pre-pandemic spending habits, a significant portion of the population has been significantly affected by the pandemic and is now transacting less in cash.
The association representing businesses in the industry also noted that the rebound in cash transactions within retail environments was not significant, with only a slight rise in the proportion of total sales by value from 8.2% in 2021 to 11% in 2022.
In 2022, card payments were utilized in 76% of transactions, a decrease from the 82% seen in 2021. Debit cards were responsible for approximately 80% of these transactions.
The use of alternative payment methods saw a rise in 2022, with a jump from 2% of transactions in 2021 to 5% in 2022. These methods include options like buy now, pay later.
According to Hannah Regan, who serves as the BRC’s payments policy adviser, there has been a noticeable shift back to pre-pandemic patterns in payment methods. This includes a preference for smaller and more frequent purchases, as well as a slight increase in the use of cash for payments.
Additional information has been provided by the Press Association.
This information is from the Independent newspaper.
The source of this information is the Independent publication.