According to the latest banking industry data, debit card payments have exceeded cash transactions in the UK for the first time
This data is from a report released by UK Finance, a trade association for the UK financial services and banking sector. The number of transactions made with contactless payment cards increased by almost 100% to 5.6 billion transactions last year.
- 63% of UK residents now make contactless payments
- 3.4 million people now rely on cards almost exclusively rather than using cash
- Consumers made 13.2 billion transactions using debit cards last year, an increase of 14% from 2016
- During the same period, cash transactions decreased by 15% to 13.1 billion transactions
The declining use of cash suggests that consumers are becoming more comfortable using debit and credit cards. This is great news for the payment processing business sector and companies such as Kashing, a payment processor represented in our SFC EIS Growth Fund.
Card payments have overtaken cash payments about a year earlier than expected. Many smaller businesses began offering a contactless payment option. Consumers became used to the simplicity and quickness of “tap and go” or “wave and pay.” The report cited the increased popularity of e-commerce as another reason that cash transactions have declined.
The average adult in the UK last year made 54 payments a month in 2017. 20 by cash, 20 by debit cards and nine via contactless payments.
There were almost 119 million contactless cards in use by consumers at the end of 2017. 62% of credit cards and 78% of debit cards in the UK have contactless payment capability.
Over the next ten years, the use of cash should continue to become less popular. By 2027, UK Finance predicts that cash transactions will fall to 6.4 billion payments. By comparison, contactless payments should reach 36% of total transactions, an increase from its 15% share of transactions in 2017.
Stephen Jones, UK Finance’s Chief Executive, said: “These trends are likely to shift further over the next decade. Developments such as Open Banking are expected to bring extensive changes to the payments landscape, something that will likely shape how we interact with our money in the coming years.”
Who are Kashing?
Founded in 2014, Kashing’s technology aims to aid independent businesses when it comes to payment methods. Kashing offers contactless and chip and pin processing devices and is well-positioned to capitalise on consumers’ increasing card use. Whether it be online, over the phone, or face-to-face, the company aims to streamline and secure all payments. Kashing were recently invested in by our SFC EIS Growth Fund