The narrative surrounding UK digital payments has long been one of relentless growth and inevitable dominance. From contactless cards to mobile wallets, assuming cash fades out of date, as digital alternatives become more convenient and ubiquitous. However, the FCA’s Financial Life 2024 survey shows that we may be approaching a different reality: adoption of digital payments has reached its natural limits, leaving behind a substantial and lasting core of cash users who will continue to rely on physical funds in the coming years. This provides a new narrative for the future of payments and the role of cash, and questions the success of digital payment innovations.

Cash plateau and digital ceiling

investigation Established 2.6 million adults (4.8%) are heavy cash users. This is down from 5.8% in 2022. This is not surprising because we know that people use less cash than digital choices, which naturally leads to fewer cash users.

However, it is surprising that people who use debit, credit card or mobile phones for contactless payments will only increase the rate by 1%. This has increased from 91% in 2022 to 92% in 2024, which is the major slowdown in adoption, compared with 84% in 2020 and 63% in 2017.

The survey also found that when asked what payment method people used to buy everyday items in stores in the past, they chose 17% of cash, just 1% lower than in 2022. This is interesting because it shows that cash is often used more than the heavy user graphs suggested. The results show that for everyday items, debit cards’ popularity has dropped by 10% (from 51%-41%), but this has been replaced by a 9% increase in mobile payments (from 11% to 20%).

This means we have witnessed a rapid decline in cash and digital adoption in the UK over the past decade. Those who are still cash users are not just laggards waiting for better technology persuasion, they represent a fundamentally different consumer, with structured, rather than favorable reasons for cash dependence.

Four pillars of continuous cash

The survey identified four core motivations for ongoing cash use that imply permanent rather than transition:

Financial Control and Budget: The reasons why large amounts of cash users continue to use cash include budget or debt. This is not a technical preference, but a financial management strategy. As one respondent Errol said: “When I use a direct debit, when I get a bill and pay in cash, I have no control over what I do.” This represents a complex understanding of behavioral economics – the physical friction of cash imposes digital payments through design, deleting the expenditure discipline.

Trust and Privacy Issues: 47% of recash users quoted trust or privacy reasons, while 39% had more cash than digital alternatives. These are not issues that can be solved with better applications or stronger encryption. They reflect fundamental differences about financial privacy and control technologies that cannot be resolved without compromising the convenience that makes digital payments attractive.

Accessibility requirements: Investigations include Joyce’s powerful story, which has severe tremors that prevent access using touch screens and pins. Cash is not an option for people with exercise difficulties, visual impairment, or cognitive challenges, and it is often the only accessible payment method. As the population grows in age and disability awareness, the group may expand rather than contracts.

Economic marginalization: Demographics of cash users – 24% of adults excluded, 15% of ineligible populations, and 11% of low-income households – most importantly, cash dependence is often associated with broader socioeconomic factors that digital innovation cannot address.

Infrastructure feedback loop

Perhaps the strongest evidence at the core of ongoing cash is the infrastructure dynamics revealed by the investigation. Despite the decline in usage, 26% of account holders found it more difficult to withdraw cash due to closures, with 59% of recash users suffering. This has caused the creation of feedback loops: as infrastructure disappears, access becomes more difficult, potentially forcing some people to go against the will of the cash economy.

However, despite pressures applied to infrastructure pressure, the durability of this core population suggests significant resilience in cash demand. When faced with reduced access, large amounts of cash users adapt by traveling further (21%) or paying fees (6%) rather than giving up cash altogether. This behavior suggests that for this group, the need for cash services is simply not met by digital alternatives.

Limitations of digital convenience

The tech industry’s assumption has long been that digital payments will eventually become so convenient and common that cash will become obsolete. However, the investigation shows that this misunderstands the nature of the remaining cash constituencies. For many, the value of cash is not in convenience, but in its limitations – it cannot achieve overspending, its privacy, its universal acceptance without technological dependencies.

Thomas from Wales captures this perfectly: “Why do you have to use a card for a cup of coffee? Really – you want a bank statement at the end of each month, where there are 500 transactions?” This is not technical resistance; a preference for financial simplicity, digital payments, detailed tracking and seamless spending will actively undermine. This is something that many people in the digital payment world don’t understand. It seems unreasonable to one person and makes perfect sense to another.

Conclusion: Coexist, not displacement

Evidence shows that we are entering the era of coexistence of payment systems, not digital displacement. Digital payments capture most transactions and users, and they may capture without too many convincing transactions. What remains is the core of about 2.6 million heavy-duty cash users whose dependencies stem from accessibility needs, financial management strategies, privacy issues and the economic environment that digital innovations cannot solve without fundamentally changing what makes digital payments attractive. There are 17% who choose to use it for everyday supplies rather than digital alternatives, although not entirely relying on cash.

The ongoing cash core and regular users are not market failures or temporary retentions, it is a permanent feature of a mature payment system. Recognizing this reality should shift the policy focus from managing the decline in cash to ensuring sustainable coexistence between digital payment systems and cash payment systems. The future of UK payments is not cashless; it is a dual system where digital payments dominate transactions, and cash provides an important function for the important minority groups that need it the most.

Instead of asking when cash disappears, we should ask how to maintain a payment ecosystem that works to everyone, we should ask how to maintain a payment ecosystem that works to effectively serve everyone, which is the core of digital majority equity and cash dependency that may use physical funds in the coming decades. This requires new thinking on how we can solve the cash problem. The key obstacle to this cost is the shrinking of cash infrastructure. But this doesn’t have to be like this. A lower cost alternative can be obtained by using open banking, an option that runs in the UK but is only used by a few players. Exploring cash through this route also extends to the outcome of the national payment vision, which is key to ensuring cash can coexist with digital payments, thus providing an inclusive and innovative payment system that benefits all.