Contactless conquers cash in UK clash
Contactless payments, online shopping and smartphones have given debit cards the edge over cash as the most frequently used payment method in the UK, according to the latest research from trade association UK Finance.
Its latest UK “Payment Markets” report, it shows how new technology, payment innovation and changing consumer habits contributed to 13.2 billion card payments at the end of 2017 overtaking cash payments (13.1 billion) for the first time. Last year, it predicted that contactless cards would overtake cash by the end of 2018.
Stephen Jones, chief executive, UK Finance, says: “These trends are likely to shift further over the next decade. Developments such as open banking are expected to bring extensive changes to the payments landscape, something that will likely shape how we interact with our money in the coming years.”
In total, across both debit and credit cards, the number of contactless payments increased by 97% during 2017 to 5.6 billion. Almost two thirds (63%) of people in the UK now use contactless payments, and no age group or region falls below 50% usage.
An increasing acceptance of card payments by smaller businesses and people becoming “ever-more comfortable and familiar with the speed, ease and security of making low-value payments has also made the use of debit cards more popular”.
By the end of 2017 there were nearly 119 million contactless cards in circulation and, with customers and businesses increasingly choosing to use contactless cards and card acceptance devices, it is anticipated 36% of all payments across the UK will be contactless in 2027.
As consumers increasingly turn to contactless payments in situations where previously they may have paid using cash, 2017 saw a decrease in cash payments by 15% to 13.1 billion payments.
Around 3.4 million consumers almost never used cash at all, instead relying on cards and other payment methods to manage their spending.
Yet despite this fall, cash is still the second most frequently used payment method, just behind debit cards, accounting for just over one-third (34%) of all payments in 2017.
Around 2.2 million customers mainly used cash for their day-to-day shopping in 2017, although nine out of ten of them had a debit card they could use if they chose, and the majority used other payment methods to pay their regular bills.
UK Finance anticipates that cash will still retain its place as the second most frequently used payment method in 2027, “ensuring that no-one gets left behind”.
According to UK Finance, its report draws on a variety of data sources.
These include data from the UK’s payment clearing schemes, UK Finance members, the number of cards in issue, the volume and value of card payments, and the value of cash withdrawn by account holders.
You can read the full report here.