Finextra reported that the K trade association, UK Finance has determined that payments conducted in cash have fallen to the level of debit cards, which is to say, cash is still really popular, just a little less so. This trend is occurring as the use of cash in stores is declining and the use of debit cards is increasing. Contactless debit card transactions in particular are increasing. In contrast, contactless cards are hard to find in the U.S., which may be adding to the continued frequent use of cash in this country:
The latest market report from trade association UK Finance shows how new technology, payment innovation and changing consumer habits contributed to 13.2 billion card payments at the end of 2017 overtaking cash payments (13.1 billion) for the first time.
In total, across both debit and credit cards, the number of contactless payments increased by 97% during 2017 to 5.6 billion. In comparison, cash payments were down 15% year-on-year.
By the end of 2017 there were nearly 119 million contactless cards in circulation and, with customers and businesses increasingly choosing to use contactless cards and card acceptance devices, it is anticipated 36% of all payments across the UK will be contactless in 2027.
The number of cash payments in the UK is correspondingly expected to continue to fall over the next decade. There are expected to be 6.4 billion cash payments in the UK in 2027, accounting for 16% of all payments.
Even with the predicted continued growth of debit card payments, cash is still projected (by UK Finance) to be the second most popular payment method in 2027. Cash is just really hard to beat.
Overview by Sarah Grotta, Director, Debit and Alternative Products Advisory Service at Mercator Advisory Group