Debit card payments are now made more frequently than cash payments, as indicated by banking industry figures. UK Finance reports that consumers used their debit cards 13.2 billion times last year and made slightly fewer cash transactions; 13.1 billion times.
Six years ago experts predicted that by 2032 cash would all but die out; in fact, chief executive of CardSave Clive Kahn believed that only a meagre 10 percent or less of transactions would be made in cash. The projections sounded about right at the time, given the figures from the UK Cards Association. The statistics showed that there were 25% more card transactions in the UK between 2008 and 2011.
Experts expected debit cards to take over eventually, but it happened a year earlier that thought. There are several reasons why this is the case, including the ever-rising popularity of online shopping, the ease of “tap and go” or “wave and pay” and the fact that smaller businesses are increasingly embracing contactless payments.
There has also been a good deal of brilliant innovation making life even easier for consumers, such as the B app which helps users tag their spending into different categories for better budget management. With more innovations like this, it’s not difficult to explain why Brits seem eager to join the cashless train.
A survey found that 36% of people believed that cash would no longer exist by 2025 and 50% believed cash would disappear by 2035. The survey also found that 93% of people went about with a debit or credit card and 74% carried less than £30 at a time.
While the future may seem bleak for cash, some experts are of the opinion that cash will remain important for a long time to come. Chief executive of UK Finance Stephen Jones believes that the UK is nowhere near “becoming a cash-free society.”
Gareth Shaw of Which? echoes Jones as he believes that people still need to be able to get the cash they need because cash still has a crucial role to play in the daily lives of UK residents.
Cash payments may have fallen behind card payments, but only by a slim margin as cash remains the second most popular means of making payments. There’s still a significant number of people who rely mostly on cash for their everyday shopping. Last year, the figure stood at approximately 2.2 million customers and 90% of them had a debit card.
As for the question of whether the trend can be expected to continue until cash is hardly in use, there are a few factors that could keep cash in the game. In the first half of last year, £5.6m was lost to contactless fraud, which is more than the loss from cheque fraud – £5.3m. Also, a 2017 report by consumer analysts Mintel showed that most Brits aren’t thrilled at the idea of going cashless.