Payments UK; the debit card to be crowned king by 2021

Debit is kingAccording to a new report from Payments UK, the trade association for the payments industry, the debit card could take cash’s throne and crown itself king by as soon as 2021 as it becomes the UK’s most frequently used payment method.

The new report, UK Payment Markets 2016, reveals over 72,000 payments were made every minute in the UK in 2015 by consumers and businesses – totaling more than 38 billion payments. By 2025 this will go up to 79,044 payments every minute (or 42 billion in the year), with increasing card usage playing a major part.

Adrian Buckle, Chief Economist from Payments UK, said, “Technology, consumer choices, business behavior and market developments are major factors in how we choose to pay, and will have a major impact on how things change over the next ten years. This year’s UK Payment Markets report reveals a picture of consumers and businesses more ready than ever to reassess how they make payments and make the most of the convenient, cost effective and innovative options that are available.”

Cash was still the most popular payment method in 2015 accounting for roughly half (45.1%) of all payments. However it is predicted that by 2025 notes and coins will drop to being used for just over one in four (27%) payments. The tipping point for the most popular payment method will be reached in 2021 when 14.5 billion debit card payments are predicted, overtaking the forecast 13.0 billion cash payments for the first time.

Payments UK has also forecasts another landmark in 2025, when credit, debit and charge cards will account for more than half of all payments made (50.2%) – driven in large part by the increasing popularity of contactless. Focusing solely on payments made by consumers, the average UK adult made 20 card payments per month in 2015, of which around one in 10 were contactless. By 2025 we are predicted to use a debit, credit or charge card virtually every day (30 times per month) and almost half of these transactions – 14 per month – will be contactless.  Further, many of these payments may be made using a mobile phone, without consumers needing to carry their actual cards with them.

“We have a long tradition of accurately predicting payment behavior and forecasting what’s going to happen with existing ways to pay. However, with so much innovation happening in payments at the moment – not just from traditional payment providers but increasingly from new players such as retailers, FinTechs and other technology providers – it is very difficult to predict which of these new innovations will change the face of the way we pay,” added Buckle.

Jeremy Gumbley, CTO, Creditcall commented, “Contactless payments provide all the benefits of cash with the benefits of cards. In short, it’s no surprise. Millennials have mobiles and are used to their mobile being an integral part of their lives, Apple Pay and most recently Android Pay are positioned for these demographics. Paying by contactless is far more intuitive and faster than tendering cash or a traditional card.”

Perhaps now really is the time for the debit card to start shopping for a crown after all.

A free summary of highlights from the Payments UK report is available by following this link.

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Categories: Contactless Payments

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