Consumer: Cashless payments are on the increase

Cashless payments set to become more popular than coin transactions.
Cashless payments set to become more popular than coin transactions.
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Cashless payments are set to become more popular for the first time this year than transactions using coins and notes, the UK payments body is predicting.

The Payments Council has been forecasting for several years that 2015 will be the tipping point when the number of non-cash payments, including those using credit and debit cards, cheques, direct debits and standing orders and mobile payments, overtakes the number of payments made using the physical money sitting in your wallet.

The Payments Council expects that this year there will be 400 million fewer cash payments than there were in 2014 and 700 million more non-cash payments.

This would mean that in 2015 around 19 billion transactions are made with cash and 19.9 billion are made without cash, marking the first year that cash is no longer king.

The growth in online shopping and the rise of new, innovative ways to pay have led to consumers turning to a growing range of payment options in recent years.

About three-quarters of Britons now shop online, compared with just over half in 2008, according to Office for National Statistics figures released last year.

Using a card to make a contactless payment by swiping it on a reader at the till instead of having to enter your Pin number is also becoming an increasingly popular way of paying for low-value items.

Richard Koch, head of policy at the UK Cards Association, said: “Instead of having pockets full of coins or carrying wads of notes, people are increasingly choosing their cards instead.

“Three in every four pounds spent in British shops is now paid with cards and we’re all using them for smaller purchases too. It’s the rise in convenient contactless payments for lower sums and smaller transactions online which in particular are changing the way we choose to pay.”

Nearly £690m is expected to be typically spent each day in cash in 2023.