The total value of payments in the UK economy
fell 0.6 percent in the second quarter of this year, according to
the Payments Council.
Use of the Faster Payments service among
consumers is rising dramatically, cheque usage
continues to decline, but overall payment results continue to
show a “distinct lack of energy”, the organisation said in its
second quarter statistical release.
Cheque usage fell by £21.5bn ($33.2bn), a 10
percent drop compared to the same period last year. Daily usage of
cheques is also down by 290,000, over three fewer per second.
Debit cards continue to eat
into cash transactions with the amount of cash withdrawn from ATMs
decreasing by 3.2 percent to £1.6bn.
Debit cards and Faster Payments are filling
the gap left by declining cash and cheque usage. Debit card usage
rose by 12.4 percent year on year to £7.9bn and Faster Payments
increased by a dramatic 67 percent to £16.9bn as more banks
launched the service to enable consumers to make instant transfers
of funds between accounts.
“The overall payments figures show a distinct
lack of energy in the UK economy,” said Sandra Quinn, director of
communications, Payments Council.
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“The recovery may be underway, but total
payment values are not suggesting a dramatic return to strong
“Cheque usage is shrinking dramatically, while
credit cards hold less appeal for consumers and businesses.
We use cash less where there is an easy alternative, but we’re
years away from cash falling out of fashion. Debit cards are
taking over our daily purchases, while Faster Payments are fast
becoming how we transfer our money electronically.”
The data also shows that credit card spending
rose just 3.9 percent, barely ahead of inflation. The Payments
Council speculates that this could be the result of credit
constraints and a continued migration to debit cards
In addition to this minor increase, credit
card repayments rose by over seven percent when compared to the
same period last year, averaging over 99 percent in terms of the
amount of debt repaid.