At the shop counter, for the first time, Brits are more likely to make a payment using a contactless card than a cheque book. New research from Mintel, a leading market intelligence agency, reveals that cheques have been used by less than one third (31%) of Brits in the past three months*, down from 40% who used them to make a payment in 2015. As a result, cheques are now the least likely method Brits choose to part with their cash, behind contactless debit cards (39%) and contactless credit cards (34%).

Contactless usage accelerating

The use of contactless cards has soared over the past year. While just 28% of Brits used a contactless debit card to make a payment in 2015 (three months to April 2015), this has grown by 11 percentage-points in the past year to reach 39%. Similarly, usage of contactless credit cards has risen by six percentage-points to reach 34% of Brits, up from 28% in 2015.

Prospects for cashless society not great

Mintel research shows that, while cheques look set to be relegated to the history books, Brits aren’t yet ready to shed the pounds in their pockets. It indicates that:

• over half (54%) of Brits are not comfortable about the potential for a completely cashless society***, rising to three in five (61%) of those over the age of 45 and 68% of those over the age of 65
• use of pounds, pennies and notes is near universal with 97% of Brits having used cash in the three months to April 2016, making this the most common payment method.

Stop accepting cheques altogether?

The UK Payments’s monthly payment statistics show that the rate of decline in the overall number of cheques through the clearings is increasing slowly: -14% in July 2016 compared to a 13% decline in March 2015, but there were still 367 million cheque payments in the year to July 2016. 

Rich Shepherd, Financial Services Analyst at Mintel, believes that: “Part of the reason for the rapid increase in the use of contactless cards is the simple fact that they are now much more widely accepted. They’ve moved beyond coffee shops and sandwich bars and are now entirely commonplace. However, the real shift in behaviour has only come over the last few years. It’s easy to forget that contactless cards were first launched back in 2007, meaning that the technology has been on British high streets for almost a decade. People’s payment habits change slowly, as can be seen with the cheque’s stubborn refusal to disappear from the payments landscape.”

The slow change in payment habits is generally understood, so when can corporate treasurers recommend that cheques are no longer accepted they need to be careful. Acceptance of cheque removal varies by type of business and transaction:

• at point of sale: stopping accepting cheques is well established. As long as retailer accepts enough alternative payment systems, it is proving acceptable in most markets
• for bill payment: for most types of consumer payments, removing cheques doesn’t work, but in B2B payments not accepting cheques is definitely possible and starting to be accepted.