A growing number of UK retailers are abandoning cash payments as businesses grapple with fraud concerns, security risks and the rising costs of handling physical money, new research from the UK’s ATM network LINK has revealed.

Based on a survey of 1,116 small and medium-sized high street businesses, the research offers one of the clearest pictures yet of how payment preferences are changing across the UK retail landscape.

While cash remains widely used, the study found the shift towards digital payments is accelerating. Some 14 per cent of retailers have become cashless over the past year.

Overall, 77 per cent of small and medium-sized retailers still accept cash. However, almost half of in-person transactions (46 per cent) continue to be made using notes and coins.

Cash usage remains particularly strong in sectors such as independent retail, cafés and pubs, convenience stores and launderettes.

Despite this, retailers face increasing operational pressures when deciding which payment methods to support.

The biggest driver behind businesses going cashless was fraud prevention, cited by 22 per cent of respondents. Security concerns such as theft, shoplifting and violence against staff were the second biggest factor at 21 per cent, while 20 per cent pointed to declining customer demand for cash.

Operational efficiency is also playing a role. Nearly one-fifth said digital payments simplify bookkeeping and accounting processes.

Access to banking infrastructure has also become an issue. Thirteen per cent of businesses highlighted a lack of deposit facilities as a barrier, while 11 per cent cited the closure of local bank branches.

More broadly, more than four in five retailers (82 per cent) said they would value improved access to cash deposit facilities, such as Post Offices, banking hubs or deposit-taking ATMs.

Handling cash is also proving costly. The research found 46 per cent of businesses pay more than £50 per month to manage cash deposits, while 15 per cent spend more than £200 each month.

Despite these pressures, cash remains an important part of how many retailers operate. Among businesses that still accept cash, nearly half (46 per cent) actively encourage its use.

Avoiding card processing fees was cited as the main benefit by 55 per cent of businesses, while 50 per cent said cash helped with liquidity and 49 per cent highlighted the speed of cash transactions.

The research also found that many retailers are keen to preserve payment choice for customers.

Almost half of businesses (47 per cent) want to protect the ability to accept cash in the future, while more than half believe the decline of cash could harm the high street.

Support for government intervention is also noteworthy. A majority of retailers (53 per cent) said they would support a requirement for businesses to accept cash, although more than half also backed policies to encourage digital payment adoption, suggesting businesses favour a balanced approach.

The report follows a recent inquiry by the Treasury Select Committee into cash acceptance, which warned that without action the UK could risk creating a two-tier high street where some consumers are excluded from shops and services because they cannot pay digitally.

LINK’s Consumer Council said the research demonstrates the complex pressures facing businesses as payment habits evolve.

Joanna Wallace, chair of LINK’s Consumer Council, said: “It’s becoming more common to see a sign next to the till in a shop or cafe saying ‘card only’ – 20 year ago it may have been ‘cash only’.

“The ways we want to pay are changing and so are the ways we are able to pay – this research shows the complex range of factors that affect any business owner’s choice of payment types. But the continued importance of cash on the high street rings true through it all.”

To support payment choice on the high street, the report calls for several measures, including protecting local cash deposit infrastructure, taking a more coordinated approach to tackling retail crime and fraud, monitoring cash acceptance across the UK, and promoting a balanced payment ecosystem that supports both digital payments and cash.

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