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


Would you leave home without your wallet? Three in four Gen Zs mainly use their phone to pay… but we meet two who prefer good old-fashioned cash

  • Data shows 77% of 18-24s would leave their wallet at home and pay on phones
  • Contactless payments in general spiked 36% between 2020 and 2021
  • But 5million UK adults still say they rely on cash day-to-day
  • We spoke to two teenagers who are bucking the trend and prefer notes and coins

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

Recent figures from card provider Marqeta show that 77 per cent of 18-24 year olds feel confident leaving their wallet at home, choosing to rely on their phone as their primary payment method.

They are not alone, as Britons are increasingly using contactless payments, whether that is on a physical card or one linked to their mobile device.

Changes: Use of contactless payment methods rose significantly during the Covid-19 pandemic while the number of people relying on the use of cash fell in the UK

Card spending data from UK Finance shows a total of 13.1 billion contactless payments were made in 2021 – equivalent to 415 transactions every second. 

This is up 36 per cent compared with 2020, and 52 per cent higher than pre-pandemic levels in 2019.

At the same time the number of people who went cashless rose dramatically in 2020, aided by concerns over Covid transmission. 

According to the Bank of England, transactional cash use has fallen from over 50 per cent of payments in 2010 to only 17 per cent of all payments in 2020.

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

It is getting harder to access cash, though, due to the dwindling number of bank and building society branches on the high streets. 

Ten years ago there were over 13,000 branches on the UK, last year the figure was just 8,800 according to the Office of National Statistics. 

Cashing out? Notes and coins accounted for only 17 per cent of transactions in 2020, according to the Bank of England

Cashing out? Notes and coins accounted for only 17 per cent of transactions in 2020, according to the Bank of England  

This is Money has spoken to two teenagers who, despite this, prefer to keep their money where they can see it.

Katy, 19, works part time in a pub and in sports hospitality while studying for her A-levels. She uses cash as her primary payment method, opting to keep a bank account with a small amount of money deposited at all times in case of emergencies or as a last resort to pay by card.

Being paid mainly in cash she says she finds it easier to manage her money knowing what she has ‘in-hand’. Anything left over at the end of the month she puts into a separate savings account.

Living in Newcastle with her parents Katy doesn’t pay rent and told This is Money she is unlikely to start relying on a debit card anytime soon, but may consider it when or if she finds a job that pays via direct debit. 

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

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

The only issue she has found with cash payments is when she is in the supermarket. The increase of card only self-checkouts means it is harder to pay for items using notes and coins.

Likewise Camryn, 19, also based in Newcastle, relies on cash for the majority of his transactions. Citing it as a personal preference, he says he finds it easier to budget and manage his money this way.

His employer pays his monthly salary into his account, where he says he keeps enough money to pay bills and make online purchases when necessary.

He withdraws cash from his bank account as and when he needs it, storing it in his wallet or a jar at home rather than using a card to pay.

What about those who can’t access bank cards? 

Both Katy and Camryn have access to bank account, but for others this is not the case.

Use of 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, especially for the estimated 3.8 million in financial difficulty.

Access to financial services is an ongoing issue in the UK. People who lack a permanent address struggle to access banking services, and this group includes the homeless and refugees. 

In response to the need HSBC partnered with the charity Shelter in 2019 to launch its ‘no fixed address’ accounts, of which it has so far opened 2,800. 

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

Natwest told This is Money that the bank works to accommodate people without permanent addresses to open a basic account or in some cases work with them to obtain the essential documentation they need to begin an application.

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