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Digital and cashless payments see rapid growth

Cherry Reynard
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Cherry Reynard

Digital technology is transforming the way people pay for goods and services, with consumers taking a ‘pick n mix’ approach where mobile banking, mobile payments and contactless are all becoming more popular

Research by UK Finance showed almost half (48 per cent) of UK adults used mobile banking in 2018, up from 41 per cent the previous year. At the same time, the number of bank payments made using online or mobile banking in 2018 grew to 2 billion, up from 1.6 billion in 2017. In total 39.3 billion payments were made in the UK in 2018.

Around 8.5 million people have joined the digital payments revolution, and are signed up to use mobile payment services such as Google Pay, Apple Pay and Samsung Pay, equivalent to one in six (16 per cent) of the adult population.

Debit cards overtook cash as the most frequently used payment method in 2017 and remained the most frequently used payment method in 2018, accounting for nearly 40 per cent of all payments. Almost the entire adult UK population (98 per cent) now own a debit card. Contactless payments rose to 7.4 billion payments in 2018, an increase of 31 per cent on the previous year.

Adoption is not just confined to younger people: older customers are increasingly embracing the convenience of this technology, with over three-fifths (61 per cent) of over-65s making contactless payments in 2018. Cash was used for 28 per cent of payments in 2018 and is forecast to still be used for one in ten payments in a decade’s time.

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.”

Peter Janes, CEO and founder of Shieldpay, said: “Fraudsters will be rubbing their hands together with glee at the prospect of an increasingly cashless society. Money moving digitally, without adequate protections in place, means more chances for fraudsters to get their hands on people’s money.  

“As banks further integrate themselves into our everyday lives and support the shift to a cashless society it’s paramount that greater protections are put in place. Levels of fraud are at all-time high but there are solutions already available that stop fraudsters in their tracks.”