The UK Finance report demonstrates why the debate on cash has become so serious, and why it is needed for governments, banks and regulators to take an active position in safeguarding tangible money systems, even if the percentage of payments made in cash drops from six, to three, to one in 10.
Warning of the dangers of eliminating cash, recent article from Compelo Banking also sheds light on why campaigners are advising against giving up cash completely.
"Freedom of choice is important. Not only for reasons of social inclusion – even though that’s very important – but also for the groups that need cash in their daily lives."
Key findings include:
- In the UK, cash accounted for 34% of all payments in 2017.
- In the UK, 2.2 million people mainly use cash for their day-to-day shopping in 2017.
- In the UK, consumers made 13.2 billion debit card payments compared to 13.1 billion cash payments in 2017.
- In the UK, cash is predicted to remain the second most frequently used payment method in 2027.
"The choice of payment options available in the UK is allowing people to choose to pay the way that best suits them."
Excerpt from UK Finance summary
In total, there were 38.8 billion payments made in the UK in 2017, with 89% of these made by individual customers.
Over the next decade, debit card payment volumes are forecast to grow by more than any other payment method, increasing by 49% to 19.7 billion payments in 2027. This will be driven by the continuing rise of contactless payments, the ongoing growth of online shopping and ever-increasing levels of card acceptance amongst businesses of all sizes, but particularly amongst smaller businesses.
Contactless cards will account for 36% of all payments in 2027, up from 15% in 2017.
"But we’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many."
By the end of 2017 there were nearly 119 million contactless cards in circulation, with 78% of debit cards and 62% of credit cards in the UK having contactless functionality.
The number of cash payments in the UK is expected to continue to fall over the next decade, as consumers turn to alternative payment methods, most notably debit cards. There are expected to be 6.4 billion cash payments in the UK in 2027, accounting for 16% of all payments. Despite this fall, cash will remain the second most frequently used payment method in the UK in 2027.