Debit cards overtake cash for the first time in the UK
03 December 2010 | 11512 views | 1
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.