2017 was an exciting year for the UK payments market. According to a recent study conducted by UK Finance, 38.8 billion payments were made in the UK in 2017 with 85% of those payments going to what the study cause spontaneous purchases and the other 15% going towards regular bills and commitments.
When it came to debit cards it was noted that 98% of the population have a debit card and a vast majority of them use it to make day-to-day payments from the total amount of payments made in 2017 there were 13.2 billion made on debit cards and this was seen as a 14% increase from the previous year. When looking at the future of debit card payments, the study forecasts that debit card payments will increase by 49% to 19.7 billion payments by 2027.
Moving to credit card payments, there was a total of 1.3 billion payments made on credit cards, and this was a 13% increase over the previous year. UK Finance attributes some of this growth to what they call ‘transactors’ or credit card holders who typically use their credit cards to gain value-added benefits such as rewards and always pay off their bill in full every month. The study project to see the credit card payment volume increase to 3.9 billion by 2027 however they state that further growth will closely be tied to broader economic conditions.
Contactless payments saw a large crease in 2017 of 97% which equates to approximately 5.6 billion payments. One of the reasons for this significant increase is because by the end of 2017 there were nearly 119 million contactless cards in circulation and 78% of debit cards and 62% of credit cards in the UK had contact list functionality. Surprisingly the supermarket according to the study is the most popular location for contactless payments to be made with 38% of all contactless payments being made there.
Cash in 2017, however, did not fare so well in the UK as its usage fell by 15% to 13.1 billion payments and this is despite cash still being used for over a third of all payments in the UK. According to the study in 2017 three-point or million consumers almost never use cash at all, however, there are two point two million consumers who predominantly use cash. UK Finance forecasts that cash payments will continue to decline over the next decade as consumers continue to turn to alternative payment methods they expect that only 6.4 billion payments will be made in cash in the UK by 2027.
Faster payments and other remote banking services like it’s plastic counterparts saw an increase in usage in 2017. With the study finding that over two-thirds of UK adults using online banking and 41% using mobile banking. The study attributes some of the growth of remote banking payments due to the faster payment service. Due to this faster payment service, the study projects that by 2027 remote banking payments are forecasted to rise to 2.4 billion payments.
This study also makes some interesting notes around direct debit payments, mobile payments and checks usage in the UK. It’s very clear from the study that the UK of particular is moving more towards plastic and digital payments landscape, however, It’ll be interesting to watch as security becomes a primary focus of consumers how quickly they shift towards digital-focused payment options.
