Are cashless payments taking over in the UK?

Over 120 million payments will be made every single day in the UK by 2024, the equivalent of 44 billion payments a year. E-commerce, card and mobile payments are driving the increase as cash payments rapidly decline.

 

The future is cashless

According to Payments UK, the trade association for the British payments industry, the way we pay for things is set to drastically change over the next ten years.

Through the rise of the Faster Payments service (the UK’s payment clearing system), one-off transactions will skyrocket between now and 2024. Faster Payments processed 771 million payments in 2014 but that number is expected to grow to 1.94 billion in the next ten years.

Published in UK Payment Markets 2015, the trade group predicts that cashless payments are expected to grow exponentially, forecasting that direct debit payments will hit the 4.2 billion mark in 2024.

The rise is attributed to the change in consumer spending habits, with customers eager to ditch cash and turn to their debit and contactless cards.

 

British consumer habits

We are already seeing some changes in consumer spending now that the contactless spending limit has been raised from £20 to £30. Payments UK predicts that by 2016 cashless transactions will outstrip purchases made with physical money.

Take a look below at how British consumer spending will change between now and 2024.

Payments UK

Payments UK also reveal that:

  • Credit and debit cards accounted for 51 per cent of all non-cash purchases in 2014, with that number set to hit 60 per cent in 2024.
  • The volume of debit card purchases is expected to grow from 9.2 billion in 2014 to 16.0 billion in 2024.
  • Cash machines still remain the most popular way of acquiring cash, with 2.5 billion cash machine withdrawals are forecast for 2024.
  • Cheque payments are expected to decline from 2.8 per cent of all non-cash transactions in 2014 to 0.8 per cent in 2024, with 135 million consumer cheque payments and 118 million business cheque payments forecast.
  • Cash payments are set to rapidly decline, going from 18.1 billion in 2014 to 12.6 billion in 2024.

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