Cash withdrawals have fallen by 60 per cent during lockdown, as customers switch to digital banking services, according to data from LINK, the UK’s largest cash machine network.

The research, carried out online with YouGov, revealed that reluctance to handle banknotes and coins due to infection risk will lead to a 44 per cent rise in contactless payments and online transactions in the next six months.

More than half of people (54 per cent) said they are now avoiding using cash and using alternative payment methods.

In addition, almost three quarters (72 per cent) suggested the Coronavirus will affect their future use of cash. Of those, around half (51 per cent) said they will use cards more, 44 per cent said they will use contactless or mobile payments more and 34 per cent said they will do more shopping online.

However, while the research found that the Coronavirus lockdown has accelerated the decline in cash payments, there were still more than 11 million withdrawals a week from LINK machines, with a total value of £1 billion.

Close to a quarter (23 per cent) of customers said they were using the same amount or more cash since the start of the crisis. In addition, the average value withdrawn has gone up from around £65 per withdrawal, to £82 as they ‘stock up’. A total of 14 per cent consumers said they were keeping more cash at home in case of emergencies

LINK chief executive John Howells said: “The fact people are using less cash shouldn’t come as a surprise because with cafes, pubs, restaurants and some shops closed, people are travelling less and there are far fewer opportunities to spend in the first place.

“However, even if this crisis does lead to less cash use in the longer term, people should be reassured that LINK and its members will continue to ensure good access to all who still rely on it.”

Hans Tesselaar, executive director of the Banking Industry Architecture Network, said: “Before the virus struck, stats had already shown that over half of UK consumers preferred the use of digital payments.

"Fears over cash potentially harbouring the virus have only accelerated this trend - the lack of choice now means the portion of the nation who favour cash will be forced to shop and bank online. “

He added that banks will need to play a pivotal role in ensuring that the demographic of cash-first users can navigate this digital world. "Firstly, they need to make sure its services can be easily accessed and used by those that depend on it the most, like the elderly.

"Secondly, banks will need to proactively increase their support function in guiding those that need help - at such a difficult time, customer experience will be paramount to a banks success both now and in the future.”

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