Cash payments have dropped from 63% of all payments to 34% over the last 10 years, but approximately eight million people (17%) say cash is an economic necessity, according to a new report suggesting the UK is not ready to go cashless.

The Access to Cash Review highlights the overall decline in the use of cash in the UK, as well as an increase in the number of businesses that are becoming cashless and a fall in ATM use.

The report found that just under half (47%) of the UK population believe it would be personally problematic if there was no cash in society, while the number of Link ATM cash withdrawals for the year to November is down over 5% in 2018, compared to the same period in 2017.

Figures from the Association of Convenience Stores (ACS) 2018 Local Shop Report show over three quarters (76%) of convenience store customers pay by cash, while 80% of convenience stores accept contactless payments with under half (46%) of convenience stores currently offer a free to use cash machine.

ACS chief executive, James Lowman, has urged the government to protect ATM provision by taking free-to-use cash machines out of paying business rates altogether and closely monitor the impact of interchange fee cuts.

“In the convenience sector, cash is still the most common method of payment with more than three quarters of customers (76%) paying in cash, and providing access to cash through ATMs remains an essential service that helps other local businesses like window cleaners, markets and other tradesmen that may not have the option of accepting card payments,” he said.

“Cash is still an integral part of our society, and banks have abandoned high streets leaving it up to businesses like convenience stores to continue providing access to cash, but LINK’s interchange fee cuts and the high cost of business rates are making it harder to make a business case for hosting an ATM.”

British Retail Consortium policy advisor, Andrew Cregan, added: “While the majority of retailers accept both cash and card payments, some small businesses have chosen not to accept card payments. This is to avoid shops incurring hefty card costs, which surged by over 20% for retailers in 2017, putting upwards pressure on the prices consumers pay at the till.

“Others retailers are going entirely cashless to respond to changing consumer behaviours, with card payments now accounting for more than three quarters of retail sales, though this can make life difficult for the 2.7m people in the UK who continue to depend almost entirely on cash for their purchases.”