The popularity of contactless payments, online shopping and smartphones is having a significant effect on how U.K. consumers manage money and pay for things, leading to debit cards overtaking cash as the most used payment method in region, according to the latest research from U.K. Finance.
The U.K. Payment Markets report shows how new technology, payment innovation and changing consumer habits contributed to 13.2 billion card payments at the end of 2017 overtaking cash payments (13.1 billion) for the first time. This beats previous forecasts by one year when debit cards would overtake cash within one year. In comparison, cash payments were down 15 percent year-on-year, according to a press release.
The popularity of contactless payments among U.K. consumers is a key driver of debit card growth. In total, across both debit and credit cards, the number of contactless payments increased by 97 percent during 2017 to 5.6 billion. Almost two thirds (63 percent) of people in the U.K. now use contactless payments, and no age group or region falls below 50 percent use.
As consumers increasingly turn to contactless payments in situations where previously they may have paid using cash, 2017 saw a decrease in cash payments by 15 percent to 13.1 billion payments, according to the press release.
Around 3.4 million consumers almost never used cash at all, instead relying on cards and other payment methods to manage their spending. Yet despite this fall, cash is still the second most frequently used payment method, just behind debit cards, accounting for just over one-third (34 percent) of all payments in 2017. Around 2.2 million customers mainly used cash for their day-to-day shopping in 2017, although nine out of ten of them had a debit card they could use if they chose, and the majority used other payment methods to pay their regular bills.
“The choice of payment options available in the U.K. is allowing people to choose to pay the way that best suits them,” Stephen Jones, U.K. Finance CEO, said in the release. “But we’re far from becoming a cash-free society and despite the U.K. 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.”
