Debit cards overtake cash as more consumers go contactless
- Monday, June 18th, 2018
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Debit card payments have overtaken cash in the UK for the first time ever, with 13.2bn payments made on debit cards last year, up 14 per cent on 2016, according to new figures from banking trade body UK Finance.
That figure outpaces the 13.1bn payments made in notes and coins in 2017, a 15 per cent drop year-on-year as the spread of contactless technology made it easier for debit cards to be used for spontaneous payments.
With only 15 per cent of the 38.8bn payments made overall in the UK last year spent on bills and other regular commitments, spontaneous spending makes up the vast bulk of payments that occur.
According to UK Finances annual report, contactless cards accounted for around 15 per cent of all payments, with the method most commonly used in supermarkets, car parks and on public transport. The frequency of contactless payments almost doubled year-on-year, and UK Finance, which represents the major banks operating in the UK, predicts that figure will rise to over a third of all payments within the next 10 years.
Contactless payments were most popular among those aged 25 to 34, who are also the group who are most likely to abandon cash entirely; around 3.4m people barely used cash at all over the course of the year, a true sign of the changing nature of spending.
While contactless cards have proved the main driver for this shift, the rise of online shopping and smartphone payments have also contributed, and are expected to have a growing impact on how people manage their money.
“The choice of payment options available in the UK is allowing people to choose to pay the way that best suits them,” said Stephen Jones, chief executive of UK Finance. “But were far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important that it once was, it will remain a payment method that continues to be valued and preferred by many.
“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 comign years.”