Cash usage on the wane - Halifax
29 April 2014 | 5556 views | 0
Paying for goods and services in cash is on the decline as consumers embrace the convenience of plastic and automated payments, according to new current account data from the UK's Halifax.
Halifax customer data shows how spending habits are evolving, with plastic and automated payments now the most popular method of payment by both volume and size of transactions.
Debit cards are now used in 56% of all transactions. For every £100 customers spend, over a quarter (£28.87) goes on debit cards, with a further quarter (£27.72) accounted for by automated payments, with direct debits alone taking £19.90 of every £100 spent.
However, cash usage continues to decline, both as a proportion of transactions - representing just 17% of activity (down 1.8% in the last year) and £17.99 of every £100 spent (down £3.03 in the last year).
The average cost of handling cash for UK small and medium businesses has reached more than £17.8bn a year, or £3,638.57 per retailer, according to new research by payment service provider Sage Pay. However, despite this, 80% of the 1124 businesses polled say they will only embrace new payment methods, such as contactless payments, payment apps or bitcoin, if customers request it.
Anthony Warrington, director, personal current accounts, Halifax, says: "Cash continues to decline as more and more people prefer the convenience of paying on plastic and setting up automated payments for regular purchases. As the number of outlets and applications for debit cards continues to increase we've seen a corresponding decline in the use of cash."
The launch today of the national Paym mobile-to-mobile cash transfer service, and the increasing use of contactless cards in shops and for public transport journeys in the Capital, is expected to further limit the use of hard cash transactions by Brits over the coming year.