Shoppers increasingly using cash to budget
Published On Dec 4, 2024, 7:36 PM
According to the British Retail Consortium (BRC), cash use in shops has increased for the second consecutive year, reversing a long-term decline. A fifth of transactions in the last year involved cash, as many shoppers find it easier to budget with physical money amidst rising living costs. Importantly, cash remains essential for vulnerable groups, including those in abusive relationships and seniors who are uncomfortable with digital payments. Despite the shift towards digital payments among younger consumers, cash is still the second most popular payment method after debit cards. The BRC urges regulators to take action regarding card transaction fees and ensure access to cash remains available for small businesses and consumers.
Stock Forecasts
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Given the resurgence of cash usage among consumers due to budgeting needs in a high-inflation environment, this trend may benefit companies involved in cash handling, such as ATM manufacturers and financial services focused on cash logistics. Additionally, firms tied closely to retail and payment processing may see impacts depending on their adaptability to meet consumer needs for cash services.
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Conversely, retail giants that are heavily invested in cashless systems may face challenges if the cash preference continues to rise. If cash transactions grow, and merchants need to adjust their infrastructure or face consumer backlash over dismissing those who need cash, it could lead to financial stress. Companies that primarily benefit from digital payments might struggle if market dynamics shift.
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