Debit cards ‘to overtake cash by 2021’
Written by Chris Lemmon
New research from Payments UK predicts that debit cards are poised to overtake cash payments in 2021 as the UK’s most frequently used payment method. The report, ‘UK Payment Markets 2016’, provides an overview of current and future payment behaviour in the UK.
The study revealed that UK consumers made 72,000 payments per minute in 2015, totalling more than 38 billion payments. By 2025 this is predicted to increase to 79,044 payments per minute (42 billion a year) as card usage continues to rise.
Cash remained the most popular payment method in 2015, accounting for 45.1 per cent of all payments. However Payments UK predicts that notes and coins will drop to just 27 per cent of payments by 2025, with debit cards forecast to take the top spot by 2021.
The average UK adult made 20 card payments per month in 2015, of which one in 10 were contactless. The report predicts that by 2025 we will use a debit, credit or charge card 30 times per month, with 14 of these expected to be contactless.
Growth is also forecast for the Faster Payments Service, which is used to process online and mobile payments. In 2015 over two thirds of adults regularly used online banking, and a third used mobile banking. This contributed to 903 million one-off and forward-dated Faster Payments being sent, with a further 344 million standing orders processed through the service. These payments are expected to more than double over the course of the next 10 years.
Despite a 13 per cent drop in the number of cheques written in 2015, there was still more than 546 million cheque payments over the 12 months, showing that they are still valued by some as a convenient and secure method of payment.
Adrian Buckle, chief economist at Payments UK, said: “Technology, consumer choices, business behaviour and market developments are major factors in how we choose to pay, and will have a major impact on how things change over the next 10 years. This year’s UK Payment Markets report reveals a picture of consumers and businesses more ready than ever to reassess how they make payments and make the most of the convenient, cost effective and innovative options that are available.”