Cards used for more than half of payments for first time in 2019

Cards made up more than half of payments in the UK for the first time last year, according to a trade association.

UK Finance said debit and credit card accounted for 51% of the volume of payments, with online shopping and contactless cards helping to drive growth.

In 2018, 47% of payments had been made using cards.

Eight in 10 UK adults used contactless payments in 2019 and 98% of the population had a debit card.

  • 7.4 million rarely or never use cash
  • 2.1 million regularly use cash

The number of people not using cash or using it just once a month has more than doubled in two years, from 3.4 million in 2017 to 7.4 million in 2019, UK Finance said.

At the same time, 2.1 million consumers mainly used cash, choosing banknotes and coins when doing their day-to-day shopping, although the majority used other payment methods for their regular bills.

Cash payments continued their long-term decline during 2019, but still remained the second most frequently used payment method in the UK. Coins and notes accounted for just under a quarter (23%) of all payments.

Commenting on UK Finance’s findings, John Howells, chief executive of ATM network Link, said: “Less than 10 years ago, cash was used for more than half all of payments.

“Yet, over the past five months we have seen reductions in ATM volumes that were expected over five years – we think it could be as low as one in 10 payments now.

“During the lockdown we have seen a large drop in ATM volumes – down by 55% – and while these numbers have begun to come back up, Link research shows because of coronavirus, 54% of consumers say they will use cards more and a third say they will use ATMs less.

“There is still almost £1.5 billion being withdrawn from ATMs a week and millions of people aren’t yet ready to go cashless. What’s needed now is legislation to maintain cash for as long as the is needed.”

The contactless card payment limit was recently increased to £45 per transaction, up from £30.

The UK Finance figures showed supermarkets were the most popular place for contactless spending in 2019.

Some 48 million adults in the UK bought goods and services over the internet in 2019, including nearly four-fifths (79%) of over-65s.

The payments industry has launched various initiatives to help maintain access to cash for those who still rely on it.

UK Finance chief executive Stephen Jones said: “An increase in ways to pay, coupled with the change in people’s payment habits, may have inadvertently gone some way to prepare the nation for the impact of Covid-19 on their daily lives.

“With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store.

“The impact of Covid-19 may accelerate these habits for many customers; however, we are fully aware that not all customers are digitally enabled which is why we are working flat out to ensure people have access to cash and everyday banking services remain available to help the country through these difficult times.”

Natalie Ceeney, who chaired the Access to Cash Review, said: “This UK Finance data was taken before the impact of Covid-19. It’s essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people’s ability to access and pay with cash.”

Imran Gulamhuseinwala, trustee at the Open Banking Implementation Entity, a company set up by the Competition and Markets Authority, said: “These numbers represent a broader shift to digital banking, but what’s clear is that in response to Covid-19, more consumers will be using and benefiting from online and mobile banking for the first time.”

Read Full Story Click here to comment