The Payment Council's report on the way the UK pays always makes interesting reading. Some of the key findings from the report are:

Getting Paid

• The shift from cash is gathering pace as firms, the state, and pension funds increasingly eliminate cash and cheques from their payments to individuals
• Now only 9% of adults do not have a current account, and only 4% have no sort of account at all. Use of branches has declined sharply but having an account is the key to accessing all the modern ways to pay.

Spending it

• Cash still makes up the largest proportion of our daily one-off transactions – three in five of our purchases – but they are very small in value
• Just ten years ago, three quarters of our shop purchases used cash. Now just over half do
• Debit cards are quickly taking over in the lower value transaction
• We use our credit cards for bigger purchases than debit cards, and we use them less than we used to
• Cheques are very niche nowadays with usage halving every five years, but remain popular with some groups of people and some organisations. Effectively gone from the high street, we mainly use them for financial transactions
• Spending abroad doubled in a decade.

Regular Payments

• Automatic payments (like Direct Debit) are now over three quarters of our regular commitments – up from half in 2001
• By value debit cards overtook cash in 2010, even before contactless took off
• Debit card holding is now 90%, up from 84% in 2001
• In 2001 debit card spending caught up with credit cards, but now far exceeds them.

How businesses do it

• 98% of businesses are small, with fewer than 20 employees, so the payment needs of firms vary enormously according to their size and complexity
• Cheque usage is still popular with the smallest firms, but even so, cheque usage by business continues to fall sharply
• The smallest firms bank more like consumers, and often even use personal accounts
• Use of Direct Debit among businesses lags behind consumer use. Businesses prefer the flexibility on the timing of payments.

The future

• The debit card may have had its day. New technology means payment chips are now being embedded in phones, with more innovation to come
• New entrants may also appear. Smartphones are capable of scanning barcodes, a system which could easily be designed to take a payment from an account at a point-of-sale
• Paying a friend or business on your mobile as easily as sending a text is set to become a mainstream option in spring 2014, when the Payments Council launches the new mobile payments service. The service will be the first to link up every bank account in the country with a mobile number
• In future, the wallet may be obsolete altogether as more payments become electronic and our phones become the hub of our financial transactions.

Read more in the full paper here.