Why won’t cash just die? Report reveals Gen Z leading cash revival

New research challenges fintech industry assumptions about the decline of cash, revealing that 90% of consumers still count physical money among their most-used payment methods, with Generation Z emerging as surprising advocates for notes and coins.

The study, conducted by CashTech provider PayComplete across six countries including the US and UK, found that 29% of 18-24 year olds select cash as their preferred payment method – higher than any other age group – suggesting a significant shift in young consumers’ payment habits.

Data privacy concerns fuel cash revival

The research indicates that privacy concerns are creating headwinds for digital payment adoption, with 50% of consumers expressing discomfort about the level of data organisations can access through their shopping choices. More significantly for the fintech sector, 35% of consumers are more worried about retailers accessing their data than social media companies.

These concerns are translating into behaviour change, with 81% of consumers reporting they use cash specifically to minimise data sharing. The findings suggest that the fintech industry’s push towards complete payment digitalisation may be meeting resistance from privacy-conscious consumers.

Business impact of cashless strategies

The research reveals potentially serious commercial implications for businesses pursuing cashless strategies:

• 47% of consumers have abandoned purchases when cash payments weren’t accepted
• Only 26% switched to card payments when cash wasn’t accepted
• 36% left without making a purchase
• 8% went on to leave negative reviews

Notably, younger consumers were most likely to abandon purchases, with 58% of 18-24 year olds and 56% of 25-34 year olds reporting they’ve walked away from cashless retailers.

Community banking and financial inclusion

The findings highlight strong connections between cash usage and community banking. According to the research, 59% of consumers believe cash payments support community inclusivity, with this sentiment strongest in the UK (68%), Spain (64%), and Germany (62%).

The data shows that consumers are actively choosing cash to support local businesses, with 57% opting to pay in cash at independent stores to help them avoid card processing fees. This rises to 71% for small businesses, personal services, and tipping scenarios.

The research also identifies a notable link between cash and financial literacy, with 62% of respondents believing physical cash helps children develop money management skills. This finding comes amid growing concern about financial education, with the Money and Pensions Service reporting that less than half of UK children aged 7-17 have received meaningful financial education.

CashTech evolution

For the fintech industry, the research suggests an emerging opportunity in the CashTech sector – the digitalisation of physical cash management. PayComplete CEO Simon James notes that CashTech combines smart hardware and software to integrate cash management with electronic payment systems and operational infrastructure.

The technology aims to address traditional cash handling inefficiencies while maintaining the benefits of physical currency, potentially offering a middle ground between complete digitalisation and traditional cash management.

Consumer behaviour insights

Other significant findings for the payments industry include:

• 69% of consumers always carry cash for emergencies
• 80% of those carrying cash come from households earning over £96,000 annually
• 33% of cash users are aged 25-44
• 60% fall within middle-income brackets (£19,000-£63,999)
• 52% believe cash will maintain its importance in society

Future implications

The research suggests that rather than witnessing the death of cash, the payments industry may be entering a new era where physical and digital payments coexist. With 89% of consumers considering cash payment options important for their satisfaction, and new regulations like the FCA’s Access to Cash rules coming into force, financial institutions may need to reconsider their approach to cash services.

The findings particularly challenge fintech companies to address growing privacy concerns and consider how their solutions can better integrate with physical currency systems rather than attempting to replace them entirely.

The study was conducted in June 2024, surveying 5,000 consumers across the US, UK, Germany, France, Italy, and Spain, providing a comprehensive view of current payment preferences and attitudes across major Western markets.

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