Debit card payments to overtake cash by 2021
Last year, over 72,000 payments were made every minute in the UK and cash was still the most popular method, accounting for around half of all transactions.
In comparison, the popularity of cheques continues to decline – there were 13% fewer cheques written in 2015 compared to a year earlier.
However, it still resulted in more than 546 million cheque payments in the year, showing they are “still valued as a convenient and secure method of payment”.
New research from Payments UK, the trade association for the payments industry, predicts that by 2025 notes and coins will drop to being used for just over one in four transactions.
The tipping point for the most popular payment method will be reached in 2021 when 14.5 billion debit card payments are predicted, overtaking the forecast 13 billion cash payments for the first time.
It also forecasts another landmark in 2025 when credit, debit and charge cards will account for more than half of all payments made, largely driven by the increasing popularity of contactless.
The average UK consumer
According to its new report, UK Payment Market 2016, the average UK adult made 20 card payments per month in 2015, of which around one in 10 were contactless.
By 2025 it predicts shoppers will use a debit, credit or charge card virtually every day and almost half of these transactions will be contactless.
It also sees the rise of mobile phone payments where customers won’t need to carry plastic with them, as well as growth in the Faster Payments Service which is used to process these payments.
Adrian Buckle, chief economist from Payments UK, said: “Technology, consumer choices, business behaviour and market developments are major factors in how we choose to pay, and will have a major impact on how things change over the next ten years.
“This year’s UK Payment Markets report reveals a picture of consumers and businesses more ready than ever to reassess how they make payments and make the most of the convenient, cost effective and innovative options that are available.”