Gen Z is going cashless, but not everyone is ready to let go

Would you leave home without your wallet? Three out of four Gen Zs use their phones primarily for payment…but we meet two who prefer good old-fashioned cash

  • Data shows that 77% of 18-24 year olds would leave their wallet at home and pay with their cell phone
  • Contactless payments in general increased by 36% between 2020 and 2021
  • But 5 million adults in the UK still say they rely on cash every day
  • We spoke to two teenagers who, bucking the trend, prefer banknotes and coins

According to a new study, more than three-quarters of Gen Z leave home without their wallets, opting instead to pay for things contactless on their phones.

Recent figures from card provider Marqeta show that 77 percent of 18-24 year olds are confident about leaving their wallets at home and relying on their phone as their primary payment method.

You are not alone as Brits are increasingly using contactless payments, whether on a physical card or a card connected to their mobile device.

Changes: The use of contactless payment methods has increased significantly during the Covid-19 pandemic, while the number of people who rely on using cash has declined in the UK

Data on card spending from UK Finance shows a total of 13.1 billion contactless payments were made in 2021 – the equivalent of 415 transactions per second.

That’s 36 percent more than in 2020 and 52 percent more than before the pandemic in 2019.

At the same time, the number of people going cashless rose dramatically in 2020, helped by concerns about Covid transmission.

Transactional cash usage has fallen from over 50 percent of all payments in 2010 to just 17 percent of all payments in 2020, according to the Bank of England.

But the trend isn’t for everyone. More than 5 million UK adults still rely on cash in their daily lives and it remains the preferred payment method for 21 per cent of the population – just slightly down from 23 per cent before the pandemic.

However, access to cash is becoming increasingly difficult due to the dwindling number of bank and building society branches on the high streets.

Ten years ago there were over 13,000 branches in the UK, down from 8,800 last year, according to the Office of National Statistics.

Pay off? Notes and coins accounted for just 17 percent of transactions in 2020, according to the Bank of England

This is Money spoke to two teenagers who still prefer to keep their money where they can see it.

Katy, 19, works in a pub and in sports gastronomy while graduating from high school. Using cash as her primary payment method, she chooses to keep a bank account with a small amount of money on deposit at all times for emergencies, or as a last resort to pay by card.

Being paid primarily in cash, she finds it easier to manage her money when she knows what’s “on her hands”. Anything left over at the end of the month is put into a separate savings account.

Katy, who lives in Newcastle with her parents, doesn’t pay rent and told This is Money she probably won’t be relying on a debit card anytime soon, but she might consider it if or if she finds a job which is paid by direct debit.

Just 17% of transactions in the UK were made with cash in 2020, down from 50% in 2010

The only problem she’s found with cash payments is when she’s at the supermarket. The rise of card-only self-checkouts means it’s becoming more difficult to pay for items with notes and coins.

Likewise, 19-year-old Camryn, who also lives in Newcastle, relies on cash for most of his transactions. He calls it a personal preference and says he finds it easier to budget and manage his money this way.

His employer pays his monthly salary into his account, which he says has enough money to pay bills and shop online when needed.

He withdraws cash from his bank account when needed and keeps it in his wallet or a jar at home instead of paying with a card.

What about those who don’t have access to bank cards?

Both Katy and Camryn have access to a bank account, but others don’t.

Using cash is vital for the 1.2 million people in the UK who have limited access to banking services and can be an essential budgeting tool, particularly for the estimated 3.8 million people in financial difficulties.

Access to financial services is an ongoing issue in the UK. The homeless have difficulties accessing banking services and this group includes the homeless and refugees.

In response to the need, HSBC partnered with charity Shelter in 2019 to open their nomadic accounts, of which it has opened 2,800 to date.

It also operates a separate program for refugees, under which it has opened 3,000 since launching in March this year.

Natwest told This is Money that the bank is working to accommodate homeless people opening basic accounts, or in some cases working with them to get the essential paperwork they need to apply.

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Gen Z is going cashless, but not everyone is ready to let go

Source link Gen Z is going cashless, but not everyone is ready to let go

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