UK consumers are now using debit cards more than cash to buy day-to-day goods, according to figures released by UK Finance. The UK's trade association for the finance, banking and payments industry announced that debit card payments have overtaken cash use for the first time, showing that contactless technology, payment innovation and changing consumer habits have taken “a firm hold on day-to-day spending”.
UK Finance stated that:
- at the end of 2017, UK consumers made 13.2 billion debit card payments compared to 13.1 billion cash payments;
- almost two-thirds of Britons now use contactless payments as the number of payments doubles in one year;
- evolving consumer habits, increasing access to card payments and new technology are providing consumers with more choice;
- despite this, cash is predicted to remain the second most frequently used payment method in the UK in 2027.
The relatively recent introduction of contactless payments in the UK has been a key driver of the growth of card payments: the number of contactless payments increased by 97 per cent during 2017 to 5.6 billion. Debit cards have overtaken cash as the most popular payment method a year earlier than forecasts predicted. UK Finance forecasts that 36 per cent of all payments across the UK will be contactless in 2027, up from 15 per cent in 2017.
UK Finance's chief executive Stephen Jones said: “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 UK Finance figures also show that:
- The number of cash payments in the UK is expected to continue to fall over the next decade, as consumers turn to alternative payment methods, most notably debit cards. There are expected to be 6.4 billion cash payments in the UK in 2027, accounting for 16 per cent of all payments. Despite this fall, cash will remain the second most frequently used payment method in the UK in 2027.
- The average adult in the UK made 54 payments per month during 2017. Of these, 20 payments were by debit card with another 20 made by cash. The average adult also made nine contactless payments per month in 2017. The number of contactless payments made per month was significantly higher than in 2016 (five).
- By 2027 the average adult in the UK is forecast to make a similar number of payments each month however the frequency of using certain payment methods will change. 28 of these payments will be made using debit cards, with cash being used 12 times each month. The average adult will also make 22 contactless payments per month in 2027.
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