The old adage that cash is king is about to be kicked into the long grass, new research suggested this morning – with card payments about to whoosh ahead of cash payments.
A study by Payments UK found although cash is still the biggest method of payment – some 45 per cent of all UK transactions were done by cash in 2015 – credit, debit and charge cards are creeping up behind it.
In fact, it suggested that card transactions will overtake cash in 2021, when 14.5bn credit card payments will take place, overtaking 13bn cash payments (not quite cashless – but certainly less cash).
By 2025, then, cards will account for more than half of all payments – driven, not surprisingly, by the ever-increasing popularity of contactless.
Meanwhile, the popularity of the humble cheque continues to dwindle: the research found that there were 13 per cent fewer cheques written in 2015, compared to the year before – although that still meant there were 546m cheque payments during the year.
Direct debits, on the other hand, were used by 85 per cent of current account holders, with 3.9bn payments totalling £1.2 trillion made during 2015. That said, Payments UK suggested their popularity will plateau somewhat – with 4.3bn payments forecast in 2025.
Adrian Buckle, Payments UK's chief economist, said technology will continue to play a huge part in how people pay.
“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 ten years.
"Consumers and businesses [are] 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."