5.4 million people across the UK, or 10% of consumers, according to UK Finance, have made no more than one payment with cash per month last year. Compare this to 2017, in which 3.4 million people rarely used cash, and it’s clear that cash’s role as the main form of transaction is quickly fading away. This is backed up by only 4% of the population, or 1.9 million people, confirming they still use cash as their main payment option.
Overall, cash payments made up only 28% of payments made in 2018 and based on recent statistics, this number is expected to drop to 10% in a decade from now. This can be seen as quite a drastic change when little more than a decade ago in 2008, cash still made up 60% of payments.
The Change In Payment Options
With more bank branches and cash machines closing as time goes on, those that still use cash as their main source of money are facing a definite problem. This hasn’t been overlooked, with UK Finance working with the Joint Authorities Cash Strategy Group (JACS) to assure cash will still be in steady supply to those who still use it.
One major factor in this change in dynamics would be public transport having implemented technology capable of reading contactless cards and increasing the limit of such payments to £30 in 2015.
The main form of payment nowadays is the debit card, it is having surpassed cash in 2017 and retained this position in 2018, making up 38% of last year’s total payments. They are even estimated to make up 50% of all payments by 2024. As for contactless cards, they made up 16% of consumer payments in 2017 and 21% in 2018, showing that they too are on the rise. As of now, 69% of UK adults use contactless cards.
Statistics And Rise
Some payment options tend to be more popular depending on factors of age or location. For instance, people living in the UK’s south-east and East Anglia mainly use contactless cards, while this is less common in the north-west. Contactless is now being increasingly favoured by older people, with them being the payment option of 50% of those over 65 years old in 2017 and rising to 61% by 2018.
Adults make an average of 11 contactless card payments each month, expected to rise to 24 per month by 2028. 48% of adults in the UK also use mobile banking online according to UK Finance’s Payment Markets report, a fair rise from 41% in 2017.
8.5 million people have been registered on mobile payment services such as Google Play as of the end of last year. This shows that the percentage of the population using such services have risen from 2% in 2016 to 16% as of now.
The percentages of each region’s amount of contactless card users according to UK Finance are:
- South East and East Anglia, 72%
- Midlands, 71%
- London – 70%
- Wales – 70%
- Scotland – 69%
- South West – 67%
- North East and Yorkshire – 66%
- Northern Ireland – 66%
- North West, 58%
As for the average number of payments made by UK adults each month last year:
- 28 card payments, 11 of which are contactless
- 17 cash payments
- 6 direct debit payments
- 3 payments made with online/mobile banking
- 8 standing orders
- 3 cheques
Stephen Jones, the chief executive of UK Finance, cited the change in consumer mentality as the reason for this drastic boost in contactless payments, it mainly coming down to only choosing select options out of a variety for the most convenient experience.
“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.”
Cash’s Remaining Importance
Stephen Jones also cited the change in technological advancements as a major reason for the sudden rise, though admitted maintaining cash is still important due to the preference for it as an option amongst several groups.
The chief executive of ATM network Link, John Howells, placed emphasis on the importance of changing the distribution of cash to make it easier to access for all customers, hoping to aid it through the help of the industry and regulators.
Whilst the age of cash is fading, it still holds importance within the economy. The expansion of cards should be encouraged, whilst there should also be an easy access to cash as an alternative option.