Is Britain’s love affair with cash finally over?
‘Cash is king’, ‘cash economy’, ‘hard cash’ – phrases that many Briton’s grew up with may well be heard no more as we seemingly move towards a cashless society.
Recent figures from the British Retail Consortium show that only 20% of spending in the UK is now paid for using cash.
Unsurprisingly, debit and credit card payments account for almost 80% of sales by volume in 2018, with credit cards overtaking cash for the first time.
It’s debit cards that continue to lead the field, however, remaining by far the most preferred payment method accounting for 57% of all sales by volume.
In the developed world Sweden and Canada are at the vanguard of the recent move away from cash, as debit cards, credit cards, phone payment methods and apps and online transfers predominate.
In the UK, even at cafes and pubs where people buy smaller value items, card payments have taken over. Pub chain Wetherspoon reported that the proportion of cash payments had fallen by around five percentage points every year for the past four years, dropping from 78% of all purchases to 60%.
As few as one in 10 customers now pay in cash at cafes in the UK – and more are jettisoning cash altogether.
And it’s not just debit and credit cards that have been creating the headlines. Direct Debit and Bacs Direct Credit payments have also broken new records in the UK over the past year or so.
According to Bacs, which is now part of leading retail payments authority, Pay.UK, it processed a mammoth 6.4 billion transactions worth just shy of £5tr during 2018.
Throughout August 2018 alone, 580 million payments were processed, and a new daily high of 114 million transactions was set at the end of the same month but stood only briefly, as a 123 million payments were then processed in a single day in November, an increase of almost 8%.
Direct Debits soared to nearly 4.4 billion transactions in 2018 – that’s more than eight Direct Debits for every UK adult – while Bacs Direct Credit, which is used to pay wages, salaries, pensions, and benefits, as well as supplier payments, saw values of almost £3.63bn.
With figures like these, and the ‘contactless revolution’ well under way, it looks almost certain that the future lies with automated payments like Direct Debit and the humble, ubiquitous plastic card…