27 May 2017
Visit EBAday.com

Debit cards overtake cash for the first time in the UK

03 December 2010  |  11601 views  |  1 US Coin Cash

Debit card spending overtook cash transactions for the first time in the UK in the 12 months to October, according to figures released by the Payments Council.

Spending on debit cards reached £272 billion over the past year, while cash transactions stood at £269 billion, reports the Payments Council, with plastic overtaking notes and coins during the August Bank Holiday.

There were 1.6 million more transactions on debit cards every day between July and September compared with the same three months a year earlier. Cash machine withdrawals also dropped during the period, as consumers used their cards for smaller value transactions at high street stores.

In April, the Payments Council predicted that by 2018 the amount of cash used in the UK will fall by 20% after adjusting for inflation, even though total spending will rise by around 15% in real terms.

Technology and cultural changes are driving the move, says the Council, with debit cards and contactless technology taking over from cash, particularly among younger generations.

Sandra Quinn, of the Payments Council, comments: ""Cash is too cumbersome for many consumers these days - they prefer a card for anything more than the smallest transactions. We now expect our debit cards to be accepted everywhere we go - in pubs and clubs, at the corner shop, online and on the high street. Having quickly supplanted cheques, then claimed the scalp of credit cards, they have now usurped cash's throne too."

Cheque usage also continued its inexorable decline, with 104 million fewer written in the UK in the 12 months to October.

Credit card spending remained steady during the period.

Comments: (1)

Paul Love
Paul Love - Compass Plus - Nottingham | 03 December, 2010, 17:51

For many years debit cards have often been primarily used at ATMs to withdraw cash, which is then spent over the counter. This story goes to show that the UK has passed the tipping point, and we have managed to drive consumers to directly use their debit cards to spend on, rather than to withdraw cash. (Which is also good for the economy as a whole given the costs involved in printing, counting, transporting and managing cash.)

However this certainly isn't the case in many other European countries, where cash is still king. At this week's Central European Card Conference we heard that banks in Poland are now issuing contactless debit cards to encourage consumers to spend directly with their cards, and this does seem to be driving greater card transaction volumes. It will be interesting to see if we see if this approach is adopted elsewhere.

Be the first to give this comment the thumbs up 0 thumb ups! (Log in to thumb up)
Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

London council halves cash processing costs by moving to pre-paid cards

London council halves cash processing costs by moving to pre-paid cards

25 November 2010  |  8618 views  |  0 comments
MP challenges Payments Council over abolition of cheques

MP challenges Payments Council over abolition of cheques

03 November 2010  |  9131 views  |  0 comments
Ditching cash and cheques could save Ireland EUR1bn - NIB

Ditching cash and cheques could save Ireland EUR1bn - NIB

09 September 2010  |  12655 views  |  1 comments
Brits continue to turn away from cash and cheques

Brits continue to turn away from cash and cheques

09 September 2010  |  13191 views  |  3 comments
Irish minister backtracks on ATM charge proposal to discourage use of cash

Irish minister backtracks on ATM charge proposal to discourage use of cash

06 September 2010  |  8148 views  |  0 comments
No brass in pocket: Barclays' busker goes contactless

No brass in pocket: Barclays' busker goes contactless

27 August 2010  |  12225 views  |  0 comments
Cash still king - Ovum

Cash still king - Ovum

20 July 2010  |  9809 views  |  1 comments
Half of consumers think cash will be obsolete in 20 years - survey

Half of consumers think cash will be obsolete in 20 years - survey

09 July 2010  |  11041 views  |  1 comments
Cash no longer king as Brits turn to debit cards

Cash no longer king as Brits turn to debit cards

14 April 2010  |  12183 views  |  1 comments
Dutch to ditch cash by 2015 - report

Dutch to ditch cash by 2015 - report

10 February 2010  |  14532 views  |  11 comments
Europeans pay the price for dominance of cash

Europeans pay the price for dominance of cash

05 February 2010  |  11380 views  |  2 comments
For German consumers, cash is still king

For German consumers, cash is still king

27 October 2009  |  8892 views  |  0 comments
UK banks set two-year deadline to stop guaranteeing cheques

UK banks set two-year deadline to stop guaranteeing cheques

25 June 2009  |  11279 views  |  1 comments

Related company news

 

Related blogs

Create a blog about this story (membership required)
visit www.response.ncr.comvisit www.events.sap.comvisit www.ebaday.com

Top topics

Most viewed Most shared
BBVA launches Open API marketplaceBBVA launches Open API marketplace
12632 views comments | 49 tweets | 78 linkedin
Bank/fintech collaboration can take transaction banking to new heightsBank/fintech collaboration can take transa...
7549 views comments | 12 tweets | 24 linkedin
R3 raises $107mR3 raises $107m
6508 views comments | 16 tweets | 16 linkedin
TransferWise launches multi-currency business bank accountsTransferWise launches multi-currency busin...
6483 views comments | 12 tweets | 20 linkedin

Featured job

Six Figure Base + Commission + Stock Options
London

Find your next job