One in 10 UK adults, just over five million people, are choosing to live a largely cashless lifestyle, while debit cards continue to be the most popular payment method according to UK Finance’s latest Payment Markets Report.
The report states that, having overtaken cash in 2017, debit cards remained the most popular payment method in 2018, accounting for nearly 40% of all payments. In addition to this, nearly the entire adult UK population (98%) now own a debit card. It also forecasts that by 2024, debit cards will be used for half of all payments.
The rise in debit card use has been in part contributed to the growth in contactless payments, which increased to 7.4bn in 2018, an increase of 31% on the previous year. Overall 69% of the UK adult population uses contactless payments and it is not just younger people who have embraced this technology, as over three-fifths (61%) of over-65s made contactless payments in 2018, which is an increase of 50% from 2017.
Although cash payments were still the second most frequently used payment method in 2018, its popularity continued to fall, decreasing by 16%, while one in 10 (5.4 million consumers) chose not to use cash at all. Despite this, cash was used for 28% of payments in 2018 and, although its popularity is forecasted to continue to fall resulting in it being used for just one in 10 payments by 2030, there will still be the need for cash in the near future, as consumers continue to value cash for their day-to-day finances.
While cash payment is falling, mobile payments are on the rise. According to the Payment Markets Report by the end of 2018 an estimated 8.5m people (16%) were registered for mobile payment services such as Google Pay, Apple Pay and Samsung Pay – this is a 14% increase in just two years as just 2% of people were registered in 2016.
Stephen Jones, chief executive of UK Finance, said: “More and more customers are now opting for the speed and convenience of paying with their contactless cards, or using mobile banking to check their balances and make transfers while on the move. This rapid rate of technological change is set to continue over the coming decade, as people embrace the ever-widening number of ways to pay and manage their finances, depending on their needs and lifestyle.
However, technology is not for everyone and cash remains a payment method that is valued and preferred by many, so maintaining access to cash will be vital to ensure no customer is left behind.
We are working with the Joint Authorities Cash Strategy Group (JACS) and wider stakeholders, to ensure all customers have a choice in how they pay for goods and services in future.”
The trend towards a more cashless society has worried some who are concerned that a number of people won’t be able to access cash in the future, particularly those who live in rural areas, despite needing cash to pay for services and goods. In July 2018 the Access to Cash Review was launched to look at the future of access to cash across the UK and in March it published its Final Report detailing its action plan to protect cash access. This calls for the Government and regulators to step in urgently to ensure cash remains viable, a ‘Guarantee to Cash Access’ for all, and a more efficient, effective and resilient wholesale cash infrastructure.
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