When you're paying at the checkout, what's your method of choice? Chances are, your card will be dug out on a regular basis. In fact, research from the Payments Council has revealed that, even though cash is still the biggest single payment method used, cashless payments as a whole have overtaken notes and coins for the first time.
The figures show that the use of cash by consumers and businesses fell to 48% of all payments last year, accounting for 18.3 billion of all transactions. This is still by far the biggest single payment method – debit cards came next on the list, accounting for 24% of transactions – but as a whole, the remaining 52% of payments were made up of electronic formats.
This included direct debits (10%), credit or retailer cards (6%), Bacs transfers (6%) and cheques (2%), as well as debit cards. In fact, there were 19.8 billion non-cash payments in 2014, the first time electronic methods have overtaken cash, with the ongoing shift towards debit cards, contactless and mobile payments (such as Paym) fuelling this increase.
It's also interesting to note the disparity between those who regularly use cash and those who don't. The figures show that 40% of those who predominantly use cash are 65+, while over half of those who rarely use it are under 35 years old. Younger consumers in particular are far less reliant on notes and coins, and in fact, cash volumes are forecast to fall by 30% in the next decade as electronic methods become the norm.
Nonetheless, all is not lost. "Cash remains a vital part of our day-to-day lives and is still the most attractive or only option in lots of situations," said David Hensley, director of Cash Services at the Payments Council. "We continue to value notes and coins so highly for their familiarity and widespread acceptance."
There are still certain situations where cash most definitely comes out on top, too, with the vast majority of payments in pubs, clubs, newsagents and convenience stores being in the traditional note and coin format.
Some 50 million payments are made in cash per day, and the number of cash machines has increased: there were 67,963 cash machines at the end of 2013, a figure that rose to 69,382 a year later, with 91% of consumers withdrawing cash from ATMs at least once a month. Overall, cash machines were used 2.8 billion times in 2014 to withdraw a total of £189 billion.
Even so, the Payments Council predicts that the majority of transactions will continue to be in a cashless format, and if you're one of the many embracing the likes of debit and credit cards, make sure to use them wisely. Consider opting for a card that charges 0% on purchases to give you time to pay off big ticket items, or if you want to use plastic for everyday spending and are committed to paying off the balance in full each month, consider cashback credit cards to get something back every time you spend. Many current accounts now offer cashback schemes with their debit cards, too, so do your research to maximise your spending from all angles.
Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.
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