Cash Out, Card Out: UK Businesses Face Decisions Amid Rise in Digital Payments

The rise of new payment tech is making both cash and physical credit cards increasingly obsolete – but many businesses are still uncertain about how to use it, a leading fintech brand has warned.

The caution from Derbyshire-based Merchant Advice Service comes as online retail continues to develop, and as physical businesses offer digital alternatives such as self-serve till systems, apps and QR code enabled payments.

Recent figures from payment provider Worldpay show that combined, cash use accounted for just 6% of all online and physical transactions in the UK in 2024, with credit and debit cards making up 58%.

The remaining 36% came from digital payments – payments where cash or a physical card is not involved – and that share is expected to grow beyond half of all transactions by 2030.

According to Libby James, founder of Merchant Advice Service, the rapid emergence of digital payment technology has left business owners feeling overwhelmed by choice.

She said: “In the last few years there’s been a massive shift in the way we shop, but also how we pay for what we buy.

“Whether that’s ordering and paying via an app in a restaurant, buying and selling second-hand clothes on marketplaces, or paying your plumber by tapping your smartphone on theirs, there is now much more choice for consumers and suppliers.

“But while these innovations are giving businesses more options, we’re hearing from all kinds of British businesses who feel left behind by the pace of technological change.”

Merchant Advice Service was founded in 2016, amid a steady rise in the number of firms accepting digital payments alongside cash.

In 2024, the company launched The Payments Directory, a platform which connects businesses with payment providers – companies that process transactions between businesses and banks, allowing customers to pay using cards, digital wallets, open banking, phones and smart watches.

The Payments Directory is home to 58 providers, including Worldpay and Pay., and is expecting to grow beyond 200 providers by the end of 2025.

Libby continued: “Choosing a payment provider can feel like a minefield, especially for smaller businesses, with things like fees, security, and risk level to take into consideration.

“The benefits can also be huge – as well as making payments convenient and secure, some payment providers now offer things like interest on pending cash payments, which can be an added incentive for higher-turnover businesses.”

Although digital payments are becoming commonplace, the UK lags behind other countries.

In China, more than 80% of transactions were made using digital payments last year, with cash and card use declining rapidly across advanced APAC economies.

As British businesses wake up to the reality, Merchant Advice Service is being enlisted by businesses of all sizes, including well-known high street brands.

Libby said: “Since launching The Payments Directory, we’ve seen an average of 30% month-on-month growth, which has been amazing.

“It speaks volumes about how well the platform is working, and that businesses are using Merchant Advice Service as a go-to marketplace for payments.

“These businesses are waking up to the future of payments technology, which shows they are listening to customers and embracing change.”