Cash will be all but redundant by 2050 say the
Payments Council, as the UK continues to turn to alternative
payment methods such as the internet, debit and contactless
cards.
In the report titled ‘The Way We Pay
2010’, the Council states that cash payments are down 15
percent in 10 years, and of the 21 billion consumer cash payments
made in 2009, 80 percent were for less than £10.
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The council projects that in five years, cash
transactions will represent less than half of the overall
transactions made in the UK and by 2018 cash payments will have
plummeted to 20 percent, yet total spending is expected to rise by
approximately 15 percent.
Debit card usage has risen in the UK to £264 billion in 2009 and
this figure is set to double again by 2018. Every adult now uses a
debit card 158 times per year which is almost every other day. This
is up from just over once a week in 1999 and it is predicted that a
quarter of all transactions will be made using a debit card.
Mike Bowman, head of policy and markets for
the Payments Council, says: “Contactless payment for small
purchases has the potential to drive debit card usage even higher.
With 18 billion cash transactions less than £15, there’s a huge
opportunity for us to replace billions of these with a quick swipe
past a card reader.”
Technology and cultural changes are cited as
driving the move away from cash. The Council gives the way
consumers pay in pubs and clubs as an example of this shift. Pub
spending using cash as fallen by 50 percent in the last 10 years
and is expected to continue to fall to 25 percent in 2018.
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By GlobalDataPeople in the UK are also no longer being paid
in cash. 10 years ago 80 percent received their wages in cash. This
figure decreased to five percent in 2009 and is predicted to
continue to fall to two percent by 2018.
Consumers have had to turn to ATMs to access
their cash and this has contributed to the rise of the cash
machines seen in the UK today. There are currently 63,000 ATMs,
which is two and a half times more than 10 years ago.
The report claims the creation of online
banking and faster payments is accelerating the decline of the
usage of cheques as a payment method, which accounted for two per
cent of overall spending in 2009. Whether cheques are
controversially phased out of not, the Council predict that volumes
will naturally reduce by half in 2018, making up 0.8 percent of
overall transactions.
The Payments Council speculates that cash could be a thing of
the past by 2050 and notes the benefits of this. The report said:
“By 2050, using cash could well be a minority activity, much more
the preserve of informal transactions. With around a billion bank
notes created, distributed, collected and destroyed every year, the
production and secure transportation of notes is an expensive and
environmentally costly business paid for by the tax payer. A
progressive move away from cash could hold many
benefits.”
