26 May 2018
visit www.ebaday.com

Debit cards set to overtake cash in the UK three years ahead of schedule

25 May 2017  |  11853 views  |  3 tescobank

The soaring popularity of contactless cards is changing the dynamics of the UK payments industry with new forecasts predicting that paying by plastic debit will overtake cash in 2018, three years earlier than expected.

Debit cards were used 11.6 billion times in 2016, 14% more than the previous year, with just over one in five of these transactions made using contactless. Cash was still the most frequently used payment method in 2016, used for 15.4 billion payments (3.8 billion more occasions than debit cards). Four out of ten payments in 2016 were made using cash.

Analysis by Payments UK suggests that by 2018, 13.4 billion debit card payments are predicted, of which 4.6 billion (or one in three) are expected to be contactless. Cash is expected to be used for 13.3 billion payments in 2018, meaning it won’t be the most frequently used payment method for the first time.

Adrian Buckle, chief economist at Payments UK, says: “The popularity of contactless means that we expect debit cards to overtake cash as the UK’s most frequently used payment method in late 2018, three years earlier than we previously thought. This is a significant shift but it’s vital to note that even in the face of this change, we believe any claims the UK will soon become a cashless society are wide of the mark."

Ten-year forecasts put together by the industry body suggest that cash payments will decline by 43% to 8.7 billion (but still comprising 21% of all payments), while debit cards will account for 18.2 billion transactions, up by 57%, with one-in-four of all payments expected to be contatless.

Despite the progress, the UK is still lagging behind some of its European neighbours. In the Netherlands, for instance, debit card payments overtook cash in 2015 and currently commands 55% of all point-of-sale transactions.

Comments: (3)

Jeremy Light
Jeremy Light - A Payments Fintech - London 25 May, 2017, 11:01

4.6bn contactless UK debit card transactions by 2018 looks on the low side. The stats on the UK Cards Association website already show 1bn contactless debit txns in Q1 2017, almost 2.5 x the volume of Q1 2016. Applying this multiple (which has been fairly consistent for the past few years) to the 2.5bn contactless debit in 2016 suggests at least 6bn txns for 2017, I reckon it could turn out higher still, perhaps 7bn - 9bn transactions.

The implications of this is that cash is disappearing far faster than most realise, but without innovation of digital alternatives to preserve the benefits and financial inclusivity of cash - anonymity, ubiquity of acceptance, no intermediaries, no registration, immediate finality etc.

Contactles is great, but the technology is a decade old - bring on the innovation.

1 thumb up! 1 thumb up!
John Candido
John Candido - Black Cabs - Melbourne 26 May, 2017, 03:10

I completely agree with Jeremy Light's comment above. Especially when he refers to the 'financial inclusivity of cash' as being especially desirable by most people who would like to see the transition to a cashless society to mimic as far as possible all of the advantages of cash being present in digital form. That being, 'anonymity, (the) ubiquity of acceptance,  no intermediaries, no registration, immediate finality etc.'

I absolutely agree with all of these points. Any cashless society worth mentioning must make every single person come out in front. Nobody must be left behind. The poor, the homeless, the physically and intellectually disabled, any person who has visual challenges especially any person who has no visual sight.

Every single person no matter what their predicament in life may be must see, feel and realise, that any future move to a cashless society must successfully solve any problem, encompass and successfully include every person and their families, any government and business functionality, no matter what their circumstances or problems may be.   

Be the first to give this comment the thumbs up 0 thumb ups!
Robin Setty
Robin Setty - ACI Worldwide (EMEA) Limited - Watford 26 May, 2017, 09:25

I'm as much in favour of the move from cash to digital as the next man but I do worry that the implications on socitey's disenfranchised (homeless, micro-charities etc...) might be overlooked.

1 thumb up! 1 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

ATMIA hits out at 'anti-cash' financial exclusion lobby

ATMIA hits out at 'anti-cash' financial exclusion lobby

27 April 2017  |  7953 views  |  2 comments | 10 tweets | 10 linkedin
Cash in retreat, but not dead yet - ING

Cash in retreat, but not dead yet - ING

26 April 2017  |  8304 views  |  4 comments | 13 tweets | 18 linkedin
Cash continues to dominate POS payments in Europe

Cash continues to dominate POS payments in Europe

04 April 2017  |  11724 views  |  6 comments | 24 tweets | 27 linkedin
The pound will not be round, or maybe around, for much longer

The pound will not be round, or maybe around, for much longer

28 March 2017  |  6115 views  |  6 comments | 7 tweets | 13 linkedin
Britain to go cashless in 2043?

Britain to go cashless in 2043?

14 March 2017  |  15686 views  |  4 comments | 21 tweets | 27 linkedin
Cash market share squeezed by plastic cards and electronic transfers - RBR

Cash market share squeezed by plastic cards and electronic transfers - RBR

18 January 2017  |  5377 views  |  0 comments | 7 tweets | 9 linkedin

Related company news


Related blogs

Create a blog about this story (membership required)
Visit www.abe-eba.euVisit aciworldwide.webex.comVisit www.niceactimize.com

Who is commenting?

Top topics

Most viewed Most shared
satelliteAnt Financial provides tech for China Ever...
24159 views comments | 3 tweets | 2 linkedin
Digital banking transformation creating new systemic risksDigital banking transformation creating ne...
8715 views comments | 18 tweets | 26 linkedin
MUFG to roll out blockchain payment network next yearMUFG to roll out blockchain payment networ...
7457 views comments | 13 tweets | 13 linkedin
There are some things you just can't do with an appThere are some things you just can't do wi...
6613 views comments | 9 tweets | 15 linkedin

Featured job

Find your next job