Debit cards have finally overtaken cash as the most popular way of paying for things in the UK, according to figures from the country’s banking trade body. Contactless payments, which almost doubled last year, were the main driver behind the surge in debit card usage.
In 2017, debit cards were used 13.2 billion times – up 14% from 2016. Cash payments fell by 15% to 13.1 billion. Cash is still the second most popular payment method, with 34% of all transactions, but it is expected to steadily decline to 16% of payments by 2027.
About 3.4 million consumers almost never used cash in 2017, instead opting to use cards or other forms of payment. On the flip side, around 2.2 million people mainly used cash, though almost all of them had a debit card and current account for regular bill payments.
The report, which was produced by UK Finance, said that 5.6 billion contactless transactions occurred in 2017, and that 63% of people in the UK now use contactless payments. Contactless payments are expected to go from 15% of all transactions today to 36% by 2027.
Stephen Jones, head of UK Finance, said: “We’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many. 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.”
Open banking is a new initiative, pushed through by the UK’s competition and monopolies watchdog, that forces banks to make your banking data more accessible. For example, if you want to give your last 12 months of transactions to a startup that promises to save you money on your bills, the high street banks must comply. Over the next couple of years, open banking will also let you make payments directly from your bank account, rather than via a credit or debit card.