Cash payments plunge as digital payments become the default for many consumers
New research from finance and banking trade body, UK Finance, has found that debit card transactions will overtake those made with cash this year.
Meanwhile, ATM usage peaked several years ago, with more than 2.9 billion transactions taking place in 2012, falling to 2.7 billion in 2016, which amounted to £6 billion less than in the previous year.
Underscoring the scale of the change, figures from the Bank of England show that the volume of cash in circulation is increasing at its slowest rate in 46 years.
An important driver of the trend towards digital payments is likely to be the rise of contactless debit and credit cards, as well as mobile phone payments.
Figures from UK Finance show that the number of contactless payments has increased from 17.8 million in March 2014 to 469.6 million in June 2017 (the most recent month for which figures are available). This is equivalent to a 2,500 per cent increase over a three-year period.
Over the same period, the value of contactless transactions has increased from £116 million to £4.3 billion.
This trend is echoed by statistics from the industry body, showing a dramatic fall in the proportion of payments made using cash from 62 per cent in 2006, to 40 per cent in 2016.
Cash payments are expected to continue to fall into the next decade, dropping to 21 per cent by 2026.
However, while this might be welcome news for some, questions have been raised about the impact on cash-reliant businesses and vulnerable individuals.
Speaking to the Guardian Lady Tyler, Chair of the House of Lords Select Committee on Financial Exclusion, said: “I’m really concerned about this move toward a mainly cashless way of doing things. These changes might suit people who are very digitally competent, they might suit banks who can reduce their costs, [but] I really don’t think they are thinking about more vulnerable groups.”