Cash usage shrinks to below 10% for first time on record as Britons turn to

Cash usage shrunk last year to make up just 9 per cent of all payments in Britain, new data shows.

It comes as half of adults now use mobile contactless payments regularly and marks the first time on record physical money made up less than 10 per cent of transactions.

Cash was used for nearly half of all transactions a decade ago, before sliding to 23 per cent in 2019, the UK Finance reports shows.

Nearly a third now live ‘largely cashless lives,’ the data revealed, with 17million using cash once a month or less last year, while just 1.2million mainly used cash.

Meanwhile, mobile payment adoption has rocketed. Around three in five adults are registered to use mobile wallets, up from two in five in 2023.

Younger people lead the way in this adoption, but there is significant usage among older age groups.

Growing popularity: Mobile payment adoption has rocketed in the past year

UK Finance said: ‘We expect over the next decade older age groups will start to catch up with younger cohorts in terms of adoption of mobile payments, a pattern that is regularly seen following the introduction of new payment services and technologies.

‘This pattern was observed with contactless card payments, and we are likely to see it with mobile payments.’

Around a fifth of over 65s rarely used cash – using it once a month or less frequently – compared with 40 per cent of under 25s.

Cash was the second most used payment method in 2023, but has now fallen below direct debits, faster payments and credit cards.

Physical and mobile cards were the most used way to pay in the UK last year, making up 64 per cent of all transactions.

The total number of payments made in the UK last year was 48.6billion, up 1.5 per cent compared with 2023.

The report said while age is the ‘most accurate predictor’ of cash use, people on high incomes are more likely to rarely use cash than people on lower incomes.

Of those who had an annual income of £65,000 or more, 46 per cent rarely used cash, whereas those who earn £20,000 or less a year, the share of cash users was 22 per cent.

Cash is expected to decline further to make just 4 per cent of payments by 2034.

But UK Finance says: ‘Rather than the UK becoming a cash-free society over the next decade, it will transition to an economy where cash is less important than it once was but remains widely valued, and still preferred by some.’

Adrian Roberts, of ATM network Link, said: ‘Digital payments are the default choice across society, not just the young – but we must not sleepwalk into a digital-only society before everyone is ready.’