Debit cards are set to overtake cash as the UK’s most frequently used payment method for the first time by 2018, three years earlier than expected, figures show.
Britain is going cashless faster because of the rapid growth in the use of contactless cards, according to a payments industry trade association.
In May 2016, Payments UK had predicted the tipping point in the nation’s payment habits would happen in 2021 – but now it expects this to happen by next year.
Its figures show that debit cards were used 11.6 billion times in 2016 – with just over one in five of these transactions made using contactless.
Cash was used for 15.4 billion payments last year. Two-fifths (40%) of payments in 2016 were made using cash.
By 2018, 13.4 billion debit card payments are predicted – of which around one in three are expected to be contactless.
Cash is expected to be used for 13.3 billion payments in 2018 – meaning that for the first time, it will not be the most frequently used payment method.
Adrian Buckle, chief economist at Payments UK, said: “The popularity of contactless means that we expect debit cards to overtake cash as the UK’s most frequently used payment method in late 2018, three years earlier than we previously thought.
Despite the move towards plastic, cash is still predicted to make up around a fifth (21%) of payments in 10 years’ time, when it will have held on to its position as the UK’s second most frequently used payment method, according to Payments UK.
Source: The Telegraph