Britain has passed another milestone on the path to a cashless society, with 2015 the first year that cash was used for fewer than half of all payments by consumers.
Cash usage will be surpassed by debit cards and contactless payments by 2021, this is according to Payments UK, and represents the major banks, building societies and payment providers.
In 2015 cash made up 45.1{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} of payments, compared with 64{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in 2005, and it is anticipated it will fall to just a quarter by 2025. It will mainly be replaced with payments by contactless cards, which have soared in popularity.
Contactless payments grew threefold in 2015, with more than a billion “wave and pay” transactions over the year. At the start of 2016 contactless use has gained pace, particularly on the London Underground network. On the high street, one in six card purchases are now contactless and Tesco are leading the way.
But Payments UK’s annual review of how households pay for goods and services reveals that the death of the cheque has been grossly exaggerated. It said that 546m cheques were written in 2015, despite the fact most retailers now refuse to accept them.
Its annual report charts the changing nature of how British households choose to spend their money. The average adult makes a total of 648 payments a year, including cash, equal to 54 a month. Debit cards were used for 20 payments a month, with computers processing 19,276 debit card payments every minute in the UK in 2015.
Individuals, on average make six direct debit payments a month and they use their credit cards four times, but standing orders are less popular at just 0.7 a month.
The amounts of money now transferred through the direct debit system is substantial. In 2015 debits to pay mortgages, rents, energy and other bills were worth £1.22tn.
Debit card use is up 10{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34} in 2015 compared with 2014, while credit card usage was up 9{06aeb1921e0b802d2bd9c766bc98fb11cc6a46c2b0593ed9c88a0e29cf417a34}. In total, 38.2bn payments of all forms were made across the UK in 2015 and this includes 1.5bn that were made between businesses.
Source: The Guardian