Almost a quarter (22%) of UK adults have experienced card and phone payment issues in the last six months, with more than two-thirds saying it’s made them more likely to carry cash, according to new research from KPMG UK.

In a survey of 2,000 UK adults, 76% said although they are confident in the stability of payments systems for retailers and financial institutions, global IT outages and rising fraud are sparking concerns about the impact such events have on their ability to make payments.

Those worries have led to more than 70% of adults thinking that businesses need to do more to ensure the stability of payment systems.

KPMG UK said the study showed that high profile IT outages and the growth of fraud are reinforcing concerns about a cashless society, with the survey finding 77% of adults would be concerned if the UK went cashless, an increase from the 72% who expressed the same concern last year.

More than half (53%) of consumers say they use cash at least once a week, a slight uptick from 47% last year. When it comes to cash usage across age groups, 52% of 18–24 year olds report using cash at least once a week, up from 45% in 2023, which is only slightly less than older adults aged 55 and over (58%).

While cash use remains common, when it comes to physical payments the research shows that cards are still the most popular option, with government figures showing that 29.1 billion card payments were made last year.

Almost half (44%) of adults used a physical debit card the last time they made an in-person payment, followed by 23% who used a credit card and 20% who used cash. 

Just nine percent of adults said they used a digital wallet to make a physical payment.

Meanwhile, a separate study from KPMG UK of 200 payments professionals working in UK financial institutions and retailers shows that most (68%) have either started or undertaken significant payment system improvements in the last year.

KPMG UK claim that these findings echo the themes put forward in the chancellor’s new National Payments Vision unveiled earlier this month, which sets out a plan for a UK payments infrastructure that promotes consumer choice, underpinned by advanced technology, security, and resiliency.

Although the government plans to focus on driving innovation in digital payments, the strategy makes it clear that those who prefer to use cash and cards will not be left behind or financially excluded.

Recommended reading

• FinTech Scotland | Innovation, Loyalty, and the Future of Digital Payments
• 73% of Young Adults Would Struggle Without Local Bank Branches
• FCA’s Protections for Community Cash Access Come into Effect

“Greater public awareness of major events that disrupt payments, coupled with ongoing concerns related to fraud, are reinforcing consumer preference for choice in how they pay, with some migrating back to the comfort of cash in times of trouble,” said Peter Harmston, payments lead at KPMG UK.

“The government’s new vision for the UK payments infrastructure will hopefully refocus efforts on how the UK can maintain its legacy as a world leader in payments innovation. 

“As part of this, financial institutions and retailers will need to demonstrate that their payments systems not only support consumer demand for choice and convenience, but critically, are resilient in the face of broader threats to the stability and availability of payment services.”

The government’s National Payment Vision is based on the findings from the 2023 Future of Payments Review, an independent study which among its recommendations pushed for streamlining of the regulatory burdens on fintechs to accelerate innovation in digital payments, hopefully increasing the uptake of such methods among the general public.