Cash has been in steady decline in recent years as many people have turned to different ways of paying. Back in 2006, cash accounted for 62% of payments. It’s predicted that by 2031 this will be down to just 6%.
But that’s still billions of payments, and the people who rely on cash are often some of the most vulnerable people in society.Cash Access UK
In their Annual report published on 17 October 2023, LINK’s Chairman, Sir Mark Boleat, said:
‘Cash usage in the UK continues its long term decline as consumers increasingly choose to move to digital payments. The pandemic saw huge changes with ATM use almost halving. As we move forward, 2023 is likely to see a further reduction in ATM Transactions of 5% when compared to last year. This suggests that the structural decline in cash use that we were seeing before the pandemic is starting once again. This will continue to put great pressure on the commercial providers of the cash infrastructure, including ATMs. However, LINK’s research shows that 5 million consumers still regard the ability to use cash as important’.
In the UK most cash is acquired via the LINK Cash Access and ATM Network, this network connects virtually all the UK’s ATMs and provides communities with access to cash through services such as cash at retailers’ tills and Banking Hubs.
Whether you are cashless, an avid user of cash or somewhere in between here’s ten facts that you need to know.
Volumes are still tracking below previous years’ despite a boost whenever the weather is better.
During the Summer daily LINK ATM transaction volumes have been consistently less than recent years’ and cool wet weather probably did not help overall activity.
Better weather at the end of August and the beginning of September had narrowed the gap but at the time the graph below was produced volumes had remained very flat and continued their trajectory below previous years’.
With more withdrawn at each visit, whilst the number of ATM visits is declining, the value withdrawn overall has been more resilient – particularly when the sun shines. Thus the value withdrawn has tracked previous years’ more closely even just creeping ahead at the point the graph below was produced.
Change since July for Wednesdays’ transactions.
Daily LINK transactions graph showing Wednesdays’ over the last four years is shown below. There appears to be a distinct change from early July with no Wednesday volumes busier than recent years’ since then.
The proportion of balance enquiries is back to 31% of total transactions.
For many years, balances were consistently around 31% of total transactions. Lockdowns, both in 2020 and early 2021, saw them rise up to 38% as consumers wanted to check how much cash they could take out, perhaps knowing they may not be visiting an ATM again for some time. In so called “normal” periods during the pandemic, the proportion of balances fall back and they are now almost exactly where they were before the pandemic. This suggests that for some consumers at least, despite the huge increase in the use of online banking and banking apps, the ability to check their balance at an ATM remains a valuable service.
The volume of ATM transactions has decreased by 35% (pre-COVID)
Weekly LINK ATM Transaction Volumes – for the week ending 24 September the volume of ATM Transactions decreased by 35% when compared to the final week before the first COVID lockdown.
The volume of ATM transactions has decreased by 2% when compared to the equivalent week in 2022.
For the week ending 24 September:
- The volume of ATM transactions decreased by 2% when compared to the previous week.
- The volume of ATM transactions decreased by 6% when compared to the equivalent week in 2022.
- The volume of ATM transactions decreased by 15% when compared to the equivalent week in 2021.
In the week ending 24 September there were just over 27 million ATM transactions
The pattern is very similar to recent years’ although the value and especially volume is tracking at a lower level.
The weekly transactions’ graph shows the volume of transactions having their usual mid-August dip as people holiday abroad – with the numbers doing so back to pre-Covid levels. Despite better weather volumes have continued to track at a lower level throughout September and October to date.
The Volume of ATM Transactions in September down on last year by 6.1%
There were 128 million LINK ATM transactions in September, down slightly from August as normal, and down 6.1% on last year.
Year to date volumes are down on last year by 5.4%.
Monthly LINK ATM transaction values in September down on last year by 1.5%
The latest date for ATM Transaction Values shows £6.7bn for September, only down 1.5% on last year as people continue to take out more cash on each visit.
This has also contributed to the year to date resilience in the value of cash withdrawn with the value only reducing by 1.4% compared to 2022.
The average withdrawal value now exceeds £83
Average ATM cash withdrawals continue to rise (now at £83.33), as while people are visiting ATMs less often, they are taking out more cash when they do.
This suggests consumers’ use of cash itself is changing little, even if they are visiting ATMs less often. This is likely to be driven to some degree by inflation, with consumers needing more cash to buy the same basket of goods or a service and any reduction in spending being in purchases they would normally make with a card.
On average every adult withdrew £1,500 from cash machines in 2022
‘Cash is still vital to so many people,’ says Nick Quin, head of financial inclusion at cash machine network Link. ‘Millions of people are choosing new ways to pay but, last year, on average, every adult in the UK still withdrew almost £1,500 from cash machines across the country.’
In LINK’s Annual Report published on 17 October the Chief Executive John Howells said:
‘Cash is still a vital means of payment for millions of consumers, and LINK’s own research shows that over 70% have used cash in the previous two weeks. Consumers value cash for its speed, simplicity, reliability and convenience and even privacy. Many won’t leave home without it, or still make sure they keep a stash at home, even if it’s “just for emergencies”. Despite more and more consumers moving to digital payments, cash remains useful for most people and is still vital for a significant minority’.
Given this ongoing reliance and in the absence of any further significant shifts in behaviour we expect to see a similar demand for cash to continue throughout 2023.