A July 24 report from U.K. Finance stated that in 2023, 1.5 million people in the United Kingdom predominantly used cash.
This is the highest number of people using cash since 2019, the research firm said, and an increase of 600,000 from the same period a year before, an increase of 150%.
That is a notable increase.
However, of those aged 18 to 24, almost three-quarters predominantly used card, phone or other digital payments.
I have relatives who do not have debit or credit cards. I believe this due to nervousness about computer fraud and scamming and a general desire to simplify life, not complicate it. Although it can easily be argued that card payments fulfill a massive simplification.
U.K. Finance suggests the rise in the use of cash is an effect of the cost-of-living crisis in this country.
Consumers believe that it is easier to budget when their available reserves can be held or seen.
Overdraft facilities at High Street banks are not automatically accepted today, so a card payment would be rejected if there were not sufficient funds.
Another reason might be that there has been an increase in black-market activities — pay being paid in cash and therefore being spent in cash, minus any interference by the tax authorities.
In a July 2022 Bank of England survey, 20% of the U.K. population said cash was their preferred payment method. At the time, the Bank of England said it is “committed to supporting cash as a viable means of payment.”
Cashless payments surely are good news for businesses such as hotels and restaurants.
To be frank, the hotel-industry customer base is not probably among the groups who unfortunately have to make very stringent budget arrangements. But I would not want to say there would not be an upward pressure into the lower segments of segmentation.
Hotel employees will feel more comfortable working in a cashless space, no doubt, even though there are many reports of tipping falling when gratuities are paid on payment processing machines, where a smaller tip is not so obviously left.
Tipping in the U.K. is a very recent development, and many have never been happy with the situation.
Is a cashless society inevitable? When older people make way for younger generations, will there be less and less worry about the changes?
Digital payment options from iPhones and the like have fingerprint and facial ID security checks that permit charges of any level to be made, whereas debit cards have a limit.
Cashless is quicker, as long as the Wi-Fi works, and makes the profit-and-loss statement neater. It also permits the storage of guest information that might help in securing upselling and loyalty.
It is an excellent thing for the hotel industry, I would say, and with every year it gets better for it.
That said, there is a cost to hotels in card- or phone-transaction commission charges. As more and more people move to this payment method, or have no choice, who is to say those commissions will not increase? It's like how online travel agencies more than likely have upped their charges as their distribution and payment mechanisms grew stronger and more used.
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