Recent figures have revealed that consumers are now making more debit card transactions than using cold hard cash.
A total of 13.2 billion debit card payments were made last year, a 14 per cent year-on-year increase in 2017, while there was a 15 per cent drop in people using cash and coins to pay for their everyday items. according to trade body UK Finance, The rise of contactless payments and online shopping has been a prominent influence in the number of consumers opting to make card transactions for purchasing goods.
The report also states that 3.4 million Brits are no longer using cash at all, or using it very sparingly, as their method of payment.
Contactless spontaneous spenders
You’d expect a high proportion of the 38.8 billion payments made in the UK to be spent on regular bills and other financial commitments, right?
Well, you’d be wrong. According to the report, us Brits are now spur of the moment spenders with 75 per cent of transactions made going towards recreational costs – something largely put down to the use of contactless payments.
With a tap of a debit card, consumers can now efficiently settle their debts for a coffee or a new item of clothing rather than having to have the ‘arduous’ task of getting cash from an ATM or putting in their four-digit code. Two of the biggest areas for contactless payment have recognised as travel tickets and car parking fees – the latter especially, where having the correct loose change to pay for a desired time allocation isn’t always easy!
The number of contactless payments doubled over 2017 to 15 per cent (5.6 billion) of all transactions, but within the next decade, experts believe this number will rise dramatically to 36 per cent. Plus, with the contactless limit already having been increased from £20 to £30, don’t be surprised to see an increase in this limit once again to meet the tap-and-pay demand.
Millennial generation saying no to cash
UK Finance’s report highlighted that the biggest advocate for debit card over cash spending was the Millennial generation. Those aged between 25-34 were also said to be the most likely never to use any form of notes or coins, in favour of contactless payments.
This can perhaps be put down to a difference of social traits for this age group, with nipping for a catch-up coffee and heading for a few drinks at a bar being the norm compared to previous generations. Nobody wants to be stood counting out the pennies stood at the bar, so a quick tap of the debit card makes it so much easier.
Is the end nigh for cash?
There is still a huge need for cash in society. Simple things such as a pint of milk or the daily newspaper, as well as for getting taxis (yes, firms other than Uber still exist!), paying for your kid’s school trip and giving a tip in a restaurant showcase just how handy cash still is.
But for your household payments – such as the weekly shop, fixed bills and those little unexpected costs – expect your debit card to be the go-to payment method for the foreseeable future.