Modern Brits expect cash to go extinct

By UK CreditCards.com

How much cash is in your wallet? Less than £10? You're not alone.

Brits are ditching cash, and they expect businesses to follow their lead, according to a recent survey.

The popularity of debit and credit cards has been highlighted by new research showing that the majority of Brits believe cash will become extinct in the near future. A survey commissioned by small business payments specialist CardSave found that most UK consumers carry very little cash around, with the vast majority preferring to pay with plastic instead. The findings also indicate that small retailers could miss out on business by failing to accept card payments. cash-or-plastic

Brits prefer plastic
CardSave's survey, which was conducted by research and consulting firm YouGov revealed that most shoppers are reluctant to carry around large amounts of cash. More than three-fifths (62%) of the 2,069 respondents said they typically carry £20 or less in their wallets, with 35% carrying no more than £10. Meanwhile, 93% revealed that they carry a debit or credit card when they leave the house.

When customers shop with plastic, their purchases tend to be larger, according to CardSave. The average transaction at small merchants was £64 in February 2012 - about £96 when a credit card was the form of payment and just £54 when cash was used.

Refusal to accept cards a turnoff for shoppers
The research also revealed that many shoppers will give up on making a purchase if the retailer does not accept card payments. Almost two-fifths (16%) of survey participants said they had left a shop in the past 12 months because the retailer did not accept cards, while 7% had purchased less than intended. A further 22% revealed they had been forced to find an ATM and then return to the store.

Majority envision future without cash
Given the convenience and security afforded by credit cards, most Brits anticipate a cash-free future at some point. More than half (57%) of respondents claimed that cash will become extinct one day, with 50% expecting this to happen by 2035 and 36% believing it could happen as early as 2025.

"The days when consumers wanted to pay by cash are over," said Clive Kahn, chief executive of CardSave, in a statement. "They increasingly expect to pay by card for everything -- from small shops to tradespeople such as painters and window-cleaners."

Small businesses who don't already accept cards, according to Kahn, could therefore benefit significantly by doing so. This could win them more business, cause their customers to make larger purchases and help them stay competitive against major retailers.

See related: Businesses using credit cards to pay tax bills, How you pay might influence how you feel

Published: 26 March 2012