Could cash disappear from the high street?

Businesses don’t legally have to accept physical notes and coins, and seeing a sign at the till saying “card only” is far from uncommon.

So what does this mean for people who are in the habit of using cash, or simply prefer using it over digital payment methods?

After all, there are many good reasons why so many of us want to pay with notes and coins.

Why cash still matters for consumers

Many people prefer using cash because it’s a reliable back-up when technology fails.

We’ve all been there when card machines go down or payment systems crash, and it’s beyond frustrating when we can’t use the money in our wallet instead.

Cash can also be a helpful budgeting tool. 

Paying with notes and coins often makes us think twice in a way that tapping a card doesn’t and makes spending feel more “real”.

That psychological connection to physically handling money can make a big difference and help you see where your hard-earned income is going.

Another reason why cash is popular is that it doesn’t leave a digital record of what you’ve bought.

And that can be crucial for some vulnerable groups, such as people leaving abusive relationships who may have had their finances monitored or controlled by a partner.

It’s also a lifeline for people who struggle with technology and don’t have a smartphone.

So for some it’s a choice and a preference.

But for some, it’s essential.

More businesses going cashless

More than three-quarters of small and medium-sized high street businesses currently accept cash, according to research by LINK.

But the number of businesses going cashless is rising. 

In fact, 14% of businesses have stopped accepting cash over the past 12 months.

For businesses that no longer accept cash, there are several reasons behind the decision, such as:

• preventing fraud - 22%
• security concerns, such as the risk of theft - 21%
• lack of demand from customers - 20%

And around one in four are worried about the cost of handling cash, as it can involve expenses like security services and deposit charges.

Many businesses still want cash to remain an option

Despite the growing popularity of digital payment methods, many businesses still want cash to remain an option for customers.

Among those that accept it, almost half (46%) actively encourage customers to pay with cash, partly because they think it leads to faster transactions at the till.

Meanwhile, nearly half of businesses (47%) say they want to protect the choice to accept cash in the future.

Is a balanced approach the way forward?

More than half of high street businesses say they support making cash acceptance mandatory.

But a similar number support efforts to encourage digital payments.

So it’s clear that many businesses want both options to exist side by side.

That’s also the view of LINK, which says the UK should aim for a “balanced” payment system, where digital payments continue to grow but cash remains available for those who want or need it.

Get on top of your budget

If you find cash helpful in managing your budget, it could be worth going a step further and looking at all your income and outgoings.

You can then prioritise your spending and work out where savings could be made.

We’ve put together a handy guide on creating a budget, along with a free budget planner to get you started.