Payments UK predicts debit cards to overtake cash in 2018
Rapid growth in the use of contactless cards means cash will be overtaken as Britain’s most frequently used payment method by the end of 2018, according to trade association Payments UK (soon to become UK Finance).
Despite this surge, its latest forecast still does not herald the demise of cash – even in ten years’ time it is still expected to make up 21% of all payments.
Adrian Buckle, chief economist at Payments UK, says this is “three years earlier than we previously thought” – but “even in the face of this change, we believe any claims the UK will soon become a cashless society are wide of the mark”.
Its report is comprehensive, but some key points include the fact there were nearly 2.9 billion contactless payments in the UK in 2016, more than 2.7 times more than in the previous year (1.1 billion).
Contactless made up 7% of the total number of payments in 2016, with the continued growth meaning that by 2026 more than one in four (27%) payments in the UK is expected to be contactless.
Debit cards were used 11.6 billion times in 2016, 14% more than the previous year, with just over one in five of these transactions made using contactless.
Cash was still the most frequently used payment method in 2016, used for 15.4 billion payments (3.8 billion more occasions than debit cards). Four out of ten payments in 2016 were made using cash.
By 2018, when debit cards are forecast to overtake cash, Payments UK predicts 13.4 billion debit card payments, of which 4.6 billion (or one in three) are expected to be contactless.
Cash is expected to be used for 13.3 billion payments in 2018, meaning it won’t be the most frequently used payment method for the first time.
In total, 38.7 billion payments were made in the UK in 2016.