Cash 101

Issue 229 | 6 January 2022

In this edition of Payments:Unpacked Tracker we take an in-depth look at the latest values and volumes of cash acquisition through the UK’s LINK ATM network.

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Weekly ATM value and volume figures 2 January 2022.

• The volume of ATM transactions decreased by 26% when compared to the previous week in 2021.

• The volume of ATM transactions increased by 10% when compared to the equivalent week in 2020.

• The volume of ATM transactions decreased by 41% when compared to the equivalent week in 2019.

Source: Northey Point

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Weekly LINK ATM transaction volumes

Last week there was a total of 22.6 million ATM transactions which represents a decrease of 7.8 million ATM transactions over the previous week.

In 2021, there was an increase of 2.0 million transactions or 10% when compared with the equivalent week in 2020.

Since the Summer, the volume of ATM transactions had been tracking very closely to 2020. However, the paths for 2020 and 2021 diverged at the beginning of November reflecting the difference in conditions as the impact last year from the second lockdown could be seen. The divergence though was caused by the reduction in the volume of transactions in 2020 rather than any growth in the current year. Activity in 2021 remained steady as evidenced in the graph below.

For the first three weeks in December the graphs were once again merging as caution increased for 2021 in the light of the new variant as well as the re-introduction of some restrictions. Meanwhile 2020 transactions saw an increase as many areas emerged from Lockdown 2.0 albeit with similar levels of restrictions in place to the current time.

Over the last week a seasonal decrease in the volume of transactions can be seen across all three years. In 2020 new restrictions over Christmas were introduced which were soon to be followed by the third national lockdown. The restrictions in 2021 had been less severe overall contributing to the divergence across the two years.

When comparing 2019 and 2021, the trajectory in the current year was initially flatter for the week before Christmas and therefore the difference seen across the years halved from the usual reduction in the region of 36% to a reduction of 18%.

As expected this was a short term difference only with the usual divergence returning in the latest figures shown – albeit with the volume and value of transactions in 2021 remaining ahead of 2020.

With the data from 2020 reflecting the impact of Lockdown 3.0 the percentage increase in the volume of transactions is expected to increase over the next few months – but again caused by the fall in 2020 rather than any significant increase at the current time.

Source: LINK

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From Lockdown 1.0, 2.0, Tiers & 3.0 to Steps 1 to 4 out of Lockdown…and now back into new variant restrictions.

The graph below shows the impact on ATM Transactions throughout the first year of lockdowns in 2020 and initially at the beginning of 2021 with Lockdown 3.0. Then a gradual increase from January to March can be seen followed by the spikes at the end of March and mid April as restrictions were eased at each of these stages. This was followed by increased activity over the May bank holidays with fairly consistent volumes seen since that time.

Since July with the exception of the comparison with Lockdown 2.0 in 2020, activity has been very closely matched across the two years and the floor in the volume of transactions has been maintained throughout 2021. Whilst there has been a seasonal fall in the last week activity this follows a usual pattern although overall activity is also likely to have been further dampened by the overall Covid restrictions in place and cautious behaviour.

ATM Transactions are likely to increase back to the recent volumes seen and thus whilst digital payment habits were reinforced during each lockdown, there is still a consistent underlying level of cash usage by those who need to rely on cash and by those who choose to rely on cash.

Source: LINK