The continued growth of contactless technology in the UK has helped push card usage in the country past the tipping point of making up half of all payments, highlighting how non-cash payments are increasingly taking hold in developed markets.
According to recent figures from the British Retail Consortium (BRC), debit payments have overtaken cash for the first time, while credit and debit cards combined now make up more than half of all purchases by volume as well as value, accounting for 54 percent of total transactions.
The average value of card transactions has also fallen as more consumers are prepared to turn to plastic for lower-value payments for which they may have previously used cash. In 2015, the average transaction value for a debit card payment was £26.14, but in 2016, this had dropped to £23.38.
One of the biggest drivers of this has been more retailers looking to invest in new payments technology to facilitate consumer choice. Contactless solutions have played a key role in this.
The BRC found that in 2016, 68 percent of manned checkout terminals had the ability to accept contactless payments, up from just 47 percent the previous year. Six out of ten self-service checkouts were also capable of accepting contactless in 2016, with further upgrades planned this year.
However, this does not necessarily mean the days of cash are numbered. The BRC pointed out that offering consumer choice is a key priority for merchants when offering payment options – and for many people, cash remains an essential part of this mix.
Indeed, in a speech in June, chief cashier at the Bank of England Victoria Cleland said demand for cash continues to grow, with the value of cash in circulation in the UK seeing its fastest growth in a decade at the end of 2016.
“While reliance on cash is less significant than in the past, it is still crucial to everyday life and I encourage the cash industry to continue to innovate, to evolve, and to keep cash relevant and fit for purpose,” she said.