Debit cards have overtaken cash for the first time as the most popular way for consumers to shop, according to new figures.
Latest research from banking trade body UK Finance shows how changing shopping habits and contactless payments led to card payments overtaking cash. By the end of 2017, there were 13.2 billion card payments compared with 13.1 billion cash transactions, which dropped by 15%.
The annual report into consumers’ payment habits found that the popularity of contactless payments is one of the key factors behind growing use of debit cards. Across both debit and credit cards, the number of contactless payments increased by 97% in 2017 to 5.6 billion.
By the end of 2017, around 3.4 million consumers almost never used cash at all, preferring to rely on cards and other payment methods for their spending.
Almost two thirds (63%) of Brits now use contactless payments and use of contactless payments remains above 50% in every age group and region. Supermarkets were the main place shoppers used contactless payments, with 38% of all contactless payments being made in store. Shoppers aged between 25 and 34 were the most likely group to use contactless cards, with 77% of this age group making contactless payments last year.
However, that doesn’t mean that consumers are ready to ditch cash: it is still the second most popular payment method, accounting for 34% of all payments last year. Around 2.2 million customers mainly used cash for their day-to-day shopping in 2017, although nine out of 10 of them had a debit card they could use.
Stephen Jones, chief executive of UK Finance, says people may have more choice in the way they pay for goods, but cash is still an important part of their daily spend.
“We’re far from becoming a cash-free society and despite the UK transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many,” he says.
“These trends are likely to shift further over the next decade. Developments such as Open Banking are expected to bring extensive changes to the payments landscape, something that will likely shape how we interact with our money in the coming years.”