" class="no-js "lang="en-US"> Concerns about coronavirus transmission via cash leave over half of UK consumers more likely to use contactless in future when travelling - Fintech Finance
Monday, December 05, 2022

Concerns about coronavirus transmission via cash leave over half of UK consumers more likely to use contactless in future when travelling

The coronavirus pandemic is accelerating the decline of cash, with fears mounting on the possibility of it acting as a vehicle for coronavirus transmission. As a result, a new industry report from Consumer Intelligence reveals 56% of consumers declare they would be more likely to use contactless as their preferred spending method when thinking about future trips abroad.

Before coronavirus, cash was declining as a spending tool abroad, but a significant number of people still relied upon it. The study shows that, pre-pandemic, the majority (65 per cent) of people still took some cash on holiday with them, however it was used for the minority of purchases. Only a quarter of grocery store payments abroad were made in cash, with a similar percentage of hotel payments whilst at the destination.

The use of credit and debit cards seemed likely to rise even before coronavirus, with those who have used them in the past saying that they happy to do so again, and those that haven’t, happy to consider it.

Of those who didn’t use their debit card last time, 68 per cent said they would in future, while almost all (97 per cent) of those who had used one previously were happy to do so again.

However, there are off-putting aspects of debit and credit card usage which providers should understand when marketing to customers. These include, in descending order of importance.

• High charges or fees

• Security concerns

• A desire to leave bank cards at home

 

Many of the industry experts that contributed to the Consumer Intelligence report believe that physical cash, as a percentage of travel spend, will decline after coronavirus, which has already transformed our spending habits.

Louis Bridger, General Manager of International Currency Exchange UK, one of the contributors, says: “In terms of a general outlook, I would expect cash usage to diminish in the coming years, although perhaps not to as great an extent as some commentators expect… I would expect pre-paid card usage to remain static, and debit/credit card spend to increase.”

 

Commenting on how travel money companies should respond to how consumer’s international spending behaviours are likely to change when travel restrictions are lifted, Jade Edwards, Head of Banking from Consumer Intelligence, says: “Focusing on the twin pillars of convenience and good rates may help providers of prepaid cards and MCAs to prevent customers moving straight away from cash to credit and debit cards.

“It is necessary to convince them of the benefits of these other products by understanding what they value when it comes to overseas spending methods.”

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