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Creditfix LB 03-2017

Debit Cards Now Most Popular Form of Payment

Debit cards have overtaken cash as the most popular form of payment in the UK for the first time.

Debit card transactions rose by 14 per cent to 13.2 billion in 2017, while the number of cash payments fell by 15 per cent over the same year to a total of 13.1 billion.

The report from UK Finance, the trade body for the UK banking and financial services sector, also showed that use of contactless payment cards almost doubled to 5.6bn transactions over the same period.

Nearly two-thirds of British consumers now use contactless payments following their first introduction around ten years ago.

By the end of 2017 there were nearly 119 million contactless cards in circulation, with 78 per cent of debit cards and 62 per cent of credit cards in Britain having contactless functionality.
It is thought that up to 3.4 million people have almost never used cash, instead relying on electronic payments.

However, despite slipping into second place in popularity, cash is a long way from disappearing altogether, still responsible for more than a third of all transactions at 34 per cent.
Around 2.2 million customers mainly used cash for their day-to-day shopping last year, even though nine out of 10 of them had a debit card, and the majority used other payment methods to pay their regular bills.

UK Finance have predicted that cash will account for 6.4 billion payments, or 16 per cent of all transactions, in 2027, as contactless payment is forecast to account for 36 per cent of the total, up from 15 per cent in 2017.

Chief executive of UK Finance, Stephen Jones, commented: ‘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.

He continued: ‘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.’

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