The Reasons to Keep Cash in the Community

Are the voices of the vulnerable and the marginalised being overlooked when the question of the need for cash in the community is debated? With so many vulnerable people relying on cash, how would the lack of cash in the community impact their lives? How many consumers rely on others to purchase on their behalf, or can’t access the internet? Where is cash most used in the community today?

In a recent body of detailed research commissioned by NoteMachine into how the general public rely on cash, it was clear and well documented that cash is the preferred, and in some cases the only method of payment for a large number of vulnerable people. This includes the elderly, the unbanked, the homeless, those from lower income backgrounds, those in rural communities, and those with ‘special educational needs and disabilities’ (SEND). In the UK today, 1.3 million adults do not have a UK bank account. 

Research findings included:

  • Adults who are digitally excluded are nearly five times more likely to rely on cash to make all their payments
  • 10% of consumers use cash for most of or all of their daily purchases
  • 35% of over 55-year-olds thought cash was ‘essential’ for themselves, vs 20% of under 35-year-olds
  • 37% saw cash as being crucial for people who don’t want to or can’t use other payment methods
  • 37% of respondents in the NoteMachine survey said that they were more likely to use cash as the cost-of-living crisis gets worse
  • Of these respondents, 47% were lower income earners (£20,000 and under) vs 19% of those earning £50,000 and over 
  • 4% of the population rely on other people, such as a carer or family member, to make purchases on their behalf before paying them back in cash
  • During the first national coronavirus lockdown, according to Which?, one in five people said they were helping someone else with their shopping or to manage their finances and the majority of these had been repaid in cash
  • In 2022, 92% of adults in the UK were recent internet users, however, this only accounts for 54% of adults aged 75 years and over and 81% of disabled adults
  • Only 72% of UK adults used online banking and 54% used mobile banking

As cash continues to be used as a payment method across the country, the research from NoteMachine showed that 89% of people had used cash for one or more of the listed activities in the past few months: 

  • Paying and/or tipping someone 55%
  • Top up food shop – corner shop 54%
  • Food or drinks when out (pub/ restaurant) 53%
  • Giving a donation (homeless person, charity fundraiser etc) 48%
  • Giving money to a friend (putting money in a birthday card) 49%
  • Getting a haircut or beauty treatment 45%
  • Buying newspapers and/or magazines 25%
  • Paying a taxi fare 25%
  • Giving pocket money or allowance to a child 23%
  • Tickets for an activity (cinema, concert, event etc) 17%

Convenience stores represent a crucial part of the cash ecosystem, with many offering cashback services, as well as hosting ATMs. The Association of Convenience Stores (ACS) represents 33,500 local shops and petrol forecourts ranging from large national businesses operating thousands of stores to single-site independent retailers. 

As well as being a key point of cash distribution, convenience stores are examples of small, often family-run, cash-reliant businesses that make up the fabric of the local community, with small-basket purchases forming the bulk of convenience store purchases. Set in context of increases in card processing costs, this has meant that cash is often the most economical solution for store owners. 

The ACS polled 1,200 retailers:

  • 58% have seen increases in card payment processing costs since 2016
  • 70% provide cashback services 
  • 49% provide a free-to-use ATM 
  • 23% provide a pay-to-use ATM 
  • 95% of the UK’s independent convenience stores offer both cash and card payment options
  • Before Covid, 4 in 5 shopper baskets in the UK’s independent convenience stores were settled with cash, which has now stabilised to 2 in 3 baskets
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