History was made in 2014 as for the first time the number non cash payments exceeded cash payments in the UK.
Cash payments for individuals, businesses and financial organisations fell to 48% in 2014 compared with 52% in 2013. The switch comes a year earlier than the Payments Council had expected.
There are various new technologies which are making non cash payments quicker and easier for customers. Contactless payments are available at many high street retailers such as Boots, Marks and Spencer and JD Weatherspoon. Contactless cards are now issued as standard by most banks and payments up to £20 can be made without entering a PIN. This is set to increase to £30 in September 2015.
Mobile chip and PIN machines available without a contract have enabled many small businesses which did not previously take cards to begin doing so. Some companies such as iZettle are already adding contactless technology to these devices.
Mobile payments using smartphones is increasing eg. Barclay’s Pingit. Though in its infancy at the minute the technology is established in the US and Apple Pay looks set for its UK release in June 2015. This will allow payments using the iPhone 6 and Apple watch at contactless terminals.
The continued expansion of online shopping has also contributed to the trend.
Cash still king for customers but for how long?
Despite the news its worth noting that cash is still ahead of non cash payments when looking at customers alone. 52% of customer transactions were made using cash in 2014. The Payments Council predict non cash payments will overtake cash payments for customers in 2016.
- 18.3bn cash payments made in 2014, compared to 19.8bn non-cash payments
- Debit cards accounted for 24% of payments
- 1.6 million consumers predominantly used cash, 2.3 million consumers rarely used it
- 40% of those who depended on cash were aged 65 or older, half of those who used it infrequently were aged under 35
- The number of ATMs across the UK increased in 2014 to 69,382
- Cash machines were used 2.8bn times during the year to withdraw a total of £189bn.