Hard Cash Payments Are In Decline, Say Banks

By |

The cashless society is already with us, but we just don’t know it.

A new study reveals that card payments have overtaken spending cash for the first time and contactless cards are revolutionising the way shoppers make their day-to-day payments.

Banking trade body UK Finance says 13.2 billion debit card payments were made last year – up 14% on the year before.

Cash payments totalled slightly less, at 13.1 billion as spenders shunned paying with notes and coins.

And astonishingly, around 3.4 spenders handled little or no cash last year.

UK Finance reckons two out of three spenders prefer cards because they are more convenient than cash.

Contactless cards

Despite the dominance of electronic payments, cash is expected to remain the second most popular method of payment in the UK until 2027.

The card revolution crosses all demographic boundaries, with at least 50% of all genders and age groups preferring plastic to cash.

The popularity of card payments is attributed to more small businesses accepting them, and banks and credit card providers making low-value transactions cheaper and easier to process.

By 2027, contactless payments are predicted to make up 36% of all payments, as 78% of debit cards and 62% of credit cards have contactless ability built-in.

Cash-free society

Stephen Jones, CEO at UK Finance said: “The choice of payment options available in the UK is allowing people to choose to pay the way that best suits them. But we’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than 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 coming years.”

The card revolution is not confined to Britain.

Many other European countries are seeing card payments outstrip those made in cash.

In Sweden, the central bank is considering a state-backed digital currency to replace cash, although lobbyists worry that the rush to go online is leaving some elderly people behind.

Leave a Comment