The UK is on its way to becoming a cashless society, with payments in physical currency making up less than half of all consumer purchases for the first time last year. This is according to a new study from Payments UK, and reported by The Guardian, which says that the number of contactless payments made in 2015 tripled compared to 2014. A separate study released last week by the UK Cards Association estimated that one in seven transactions in the UK are made using contactless methods, which include NFC-enabled debit cards and smartphone services like Apple Pay.
“It took almost eight years for monthly contactless spending to reach half a billion pounds — now it’s grown by the same amount in just four months," Richard Koch, head of policy at the UK Cards Association, told The Financial Times last week. "This dramatic rise shows that paying with contactless is now second nature for millions of consumers who see it as an alternative to cash.”
CONTACTLESS PAYMENT IS BOOMING, BUT OLDER METHODS LIKE CHEQUES ALSO SURVIVE
The Payments UK report found that the average adult in the UK makes 648 payments a year, or around 54 a month. On average, debit cards are used for 20 of these payments, while credit cards are used for just four. But despite the rise of contactless technology, older payment methods are still surviving. Some 546 million cheques were written in the UK in 2015, averaging about 10 cheques per adult per year. This is despite the fact that most retailers in the UK refuse to accept cheques.
It's difficult to contrast these figures directly with the US, but there are some broad comparison to be made. A study from 2012 found that cash accounted for 40 percent of payments in the US by volume, compared to the 45 percent figure in this recent Payments UK report. However, while almost half of UK credit and debit cards have contactless technology (and more than 90 percent of UK adults have a debit card), only 14 percent of Americans own a contactless card. These figures suggest that although the US is less dedicated to cash than the UK, new payment methods aren't as widespread.
This post was written by: Raymond Jack
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