Debit cards to take over from cash in 2021

By

Cajsa Lykke Carlson

Published
May 23, 2016

"UK Payment Markets 2016", a new report from Payments UK, the trade association for the payments industry, predicts that in 2021, debit cards will take over from cash to become the UK’s most frequently used payment method.

In 2015, more than 72,000 payments were made every minute in the UK, totaling 38bn payments. This will increase to 79,044 payments every minute (or 42 billion in the year) by 2025, and increasing card usage plays a major part in the increase.

In 2015, cash still accounted for 45.1% of all payments, but by 2021, a tipping point will be reached as cash is predicted to be used for 13bn payments and debit cards for 14.5bn payments. By 2025, Payments UK predicts cash will be used for just 27% of payments. The same year, credit, debit and charge cards will account for more than half of all payments made (50.2%). This is largely driven by the increasing popularity of contactless payments.

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Adrian Buckle, Chief Economist from Payments UK, said:
“Technology, consumer choices, business behaviour and market developments are major factors in how we choose to pay, and will have a major impact on how things change over the next ten years. This year’s UK Payment Markets report reveals a picture of consumers and businesses more ready than ever to reassess how they make payments and make the most of the convenient, cost effective and innovative options that are available."

The report also revealed that more than five out of six (85%) current account holders used Direct Debits in 2015, but there were 13% fewer cheques written in 2015 compared to a year earlier.