By Aisling Finn on Wednesday 25 November 2020
The new report predicts that digital payments will result in a £155bn shift away from cash by the year 2023.
Some 11.6bn transactions will shift from cash to card by 2023, according to new research from Accenture.
The latest report from the financial consultancy firm finds that the UK is likely to move even closer to a cashless society, completing potential cash transactions by card and digital payment methods worth roughly £155bn over the next two years.
Moving away from more traditional payment methods is a global trend, not just present here in the UK, with Accenture predicting that £5bn in consumer spending will move away from cash by 2023.
The transition away from cash was already happening but was greatly accelerated by the spread of the Covid-19 pandemic, figures from earlier in the year showed that cash usage halved in the UK as a result.
Fairly early on in the crisis, the World Health Organisation published a fairly damning report that claimed the virus could live on banknotes for several days, with many outlets subsequently refusing to accept cash and relying solely on digital payments.
As well as Covid-19 causing a downturn in cash usage, the Accenture report finds that the shift to online shopping and e-commerce also had a hand in the shift.
In 2020 alone, online shopping is expected to boost e-commerce as a share of GDP by 17 per cent
According to the report, by 2030 over 50bn transactions, worth £484bn, are expected to shift away from cash to digital payments, with the UK being the biggest culprit for the change in Europe.
Sulabh Agarwal, global payments lead at Accenture, said: “With the UK seeing the steepest decline in cash usage across Europe, COVID-19 has dramatically accelerated the shift to digital payments at a pace banks could not have predicted.”
“The ongoing impact of the pandemic, acutely felt through the second national lockdown, will further entrench lasting shifts in consumer behaviour when it comes to how they shop and pay for products.”
Banks have also suggested that the pandemic has increased the urgency of their plans to modernise payment systems.
As part of the report, Accenture surveyed 120 bank executives and three quarters (75 per cent) of those questioned said that the rapid shift to digital payments because of the pandemic has applied greater pressure to overhaul their current payment systems.
Of those surveyed, three quarters (75 per cent) also cited the driving force behind modernising payments as being new payment infrastructure and regulations.