With debit and credit cards becoming an increasingly popular way to pay, for the first time in the UK, card payments have now overtaken cash payments as the country’s number one payment method. With card payments rising to the top, what does this mean for cash payments in the future?
Card payments on the rise
For a number of years now, card payments have accounted for the majority of retail spending by value; however, in 2016 debit card payments increased by 4.5% and credit card payments raised by 0.3% with cash payments down by 4.9%. They now account for 43% of all transactions, whilst cash has fallen to 42%. Average transaction values of card payments have also fallen, showing that cards are becoming used more often for lower value payments instead of cash. In 2013, the average transaction value of purchases made on a card was £30.53 however in 2016, this has fallen to £25.40.
Card transactions - 43%
Cash transactions - 42%
One of the biggest drivers of card payments, there are now over 108 million contactless-enabled cards in the UK and now account for a third of all card payments. Originally introduced into the UK back in 2007, these forms of payments were limited to coffee and sandwich shops but have since become more popular than ever. With more than two thirds of staffed payment terminals now able to accept contactless, spending money via contactless cards has never been easier, especially since the spend limit increased to £30 in 2015.
A cash-free Britain?
With Sweden expected to be the world’s first cash-free society by 2030, could Britain follow suit? Cash is still considered to be ‘alive and kicking’ according to Victoria Cleland, Chief Cashier and Director of Notes at the Bank of England. The Bank of England also reported that the value of notes in circulation peaked in the run up to Christmas in 2016, reaching £70bn for the first time so it may be some time before we see a cash-free Britain.