I wrote in August that the United Kingdom saw a rise in cash purchases across 2023, the first time there has been an upward trajectory for five years.
A July 24 report from U.K. Finance showed 1.5 million people in the U.K. “predominantly used cash … [up] 600,000 from the same period a year before, an increase of 150%.”
Now, the British Retail Consortium says the trend is growing, with “notes and coins … used in a fifth of transactions last year, as shoppers found cash helped them to budget better. The amount spent per purchase also dropped slightly from £22.43 ($28.45) in 2022 to £22.03 last year.”
This trend might be cyclical. A period of five years is often how this industry looks at value and capital circulation.
The consortium titled its report “Cards may be king, but cash remains crucial.”
In the U.K., we call ATMs — or automated teller machines — cashpoints or card machines. Access to cash from these machines has become a hot political issue.
In a November report, Statista said the number of cash machines in 2021 fell to 96.28 machines per 100,000 adults, down from a 20-year high of 131.29 machines per 100,000 in 2015.
The endless, tired argument is that banks say fewer people are using cash machines, so fewer cash machines are needed, when that lower use often is because there are no cash machines.
The mobile world has moved forward in leaps and bounds since 2015. This data's low points for cash-machine use were in 2020 and 2021 during the pandemic when cash use plummeted due to lockdowns and perhaps even fear of holding banknotes.
Hotels are perfect places to not use cash. Average daily rates normally are paid in advance, and it adds to the seamless, comfortable, comforting life inside a hotel not to use cash.
Many guests — especially the younger demographics — remain mobile-payments-happy. Bitcoin has reached $100,000 in value for the first time, which the BBC reported “has been especially keenly anticipated.”
I know I would be very happy if I was 20 years old knowing the hotel bar I served at was cashless. No temptation, and the book-keeping takes care of itself.
No one is going back to cash-only options, but the cash trend is an important one to bear in mind.
The news reports suggest the use of cash is within segments of society with more than the average struggles during a continuing cost-of-living crises. These people, perhaps, are not thinking of booking hotel stays.
Business advisory Capcon, which focuses on risk, outlined three risks to the hotel and hospitality industry: pressure to accept cash again; challenges in cash handling, especially for a generation that grew up in the digital space; and revenue tracking.
Hoteliers also are paying higher and higher fees for card transactions, according to the British Retail Consortium.
“Card fees paid by retailers continued to grow. The total amount paid by retailers to banks and card schemes rose by over 25% in 2023, at an extra cost of £380 million. This brought the total card fees paid to £1.64 billion,” the report said.
Banks and credit institutions have a decided interest in keeping card payments to the fore, which is how most guests and consumers want it, I imagine.
Governments must ensure the system does not alienate potential customers and see fewer transactions. In the U.K., it is the Financial Conduct Authority that regulates approximately 50,000 financial services firms and markets.
The British Retail Consortium added that business is “committed to accepting cash in their [businesses], which has a lower processing cost than other forms of payment, and we welcome the new FCA rules introduced … to support consumers’ continued access to cash. However, the dominance of cards as the preferred payment method highlights the urgency for reform on costs.”