For the first time in the UK, debit cards have taken over from cash as the consumers’ preference for payments.
New research from UK Finance shows consumers made 13.2 billion debit card payments in 2017 compared to 13.1 billion payments in cash. This comes a year earlier than projected by researchers.
Cash will not go down without a fight and will likely remain the second most popular payments choice through 2027.
Contactless payments growing
Nearly two-thirds of Britons are now using contactless payments which doubled in the past year alone, the report says:
“In total, across both debit and credit cards, the number of contactless payments increased by 97% during 2017 to 5.6 billion. Almost two-thirds (63%) of people in the UK now use contactless payments, and no age group or region falls below 50% usage.”
By the end of 2017, 119 million contactless cards were in circulation with 78% of credit cards and 62% debit cards featuring contactless functionality.
Cash will keep dropping
Cash payments dropped by 15% in 2017 and an estimated 3.4 million consumers never used cash at all.
As consumers adopt new payments methods, UK Finance predicts there will be 6.4 billion cash payments in 2027 making up 16% of all payments.
Payments usage data
The average UK adult made 54 payments per month in 2017 with 20 by debit card and 20 payments by cash. Nine payments were also made monthly by contactless payment on average.
By 2027, UK Finance expects 28 payments will be made by debit card, 12 by cash and 22 by contactless payments.
While the UK is faster to adopt contactless payments than the US, we expect similar market trends to appear as new payment methods become more familiar and more widely available in the US.
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