Brits continue to turn away from cash and cheques
09 September 2010 | 13384 views | 3
The decline of paper money in the UK continued in the second quarter, with cash and cheques both seeing dwindling usage as take-up of electronic alternatives such as debit cards and the Faster Payments service grew.
According to the Payments Council, in the second quarter cheque usage dropped by £21.5 billion, or 10%, compared to the same period in 2009. Every day of the quarter, on average 290,000 fewer cheques were written than the year before - over three fewer per second.
Despite politicians and charities raising concerns, the Council and its member banks have already voted to stop clearing cheques by 31 October 2018, bringing to an end the 350 year old payment method.
Meanwhile, the amount of cash withdrawn from ATMs was £1.6 billion lower than in the second quarter of 2009, a decline of 3.2%.
In contrast, debit card usage rose £7.9 billion year over year, up 12.4% and Faster Payments saw a £16.9 billion - 67% - rise as more banks made the service available to their customers, and consumers and businesses began taking advantage.
Credit card spending saw more modest growth, up just 3.9% as Brits shied away from racking up borrowing, says the Council which also notes that the total value of payments in the UK economy fell 0.6%, suggesting the economic recovery is far from robust.
Sandra Quinn, director, communications, Payments Council, says: "The payments revolution continues apace in the UK. Cheque usage is shrinking dramatically, while credit cards hold less appeal for consumers and businesses. We use cash less where there is an easy alternative, but we're years away from cash falling out of fashion. Debit cards are taking over our daily purchases, while Faster Payments are fast becoming how we transfer our money electronically."