Cashless payment takes over for the first time

Figures published today by the Payments Council show that payments made in cash by consumers, businesses and financial organisations in the UK fell to 48 per cent last year (from 52 per cent in 2013).

The remaining 52 per cent was made up of electronic transactions, ranging from high-value transfers to debit card payments, as well as cheques.

Cash volumes are expected to fall by 30 per cent over the next 10 years, with the demise partly driven by younger consumers being less reliant on cash.

The Payments Council, which oversees the system of transactions, said that moves towards debit card, contactless and mobile payments would further precipitate the move away from cash.

However, despite the growth of digital money, cash remained the most common specific payment method among shoppers and businesses in 2014.

Cash was used in more than eight out of 10 purchases in pubs, clubs, and newsagents last year, but in fewer than three out of 10 in petrol stations.

Some 18 billion cash payments made in the UK in 2014, worth about £250bn.

Debit cards accounted for 24 per cent of payments, followed by direct debits which accounted for 10 per cent of payments.

Ten years ago, numerous payments of under £1 were made in telephone boxes and parking meters but those have dropped sharply.

There is no prediction for cash to disappear and the number of cash machines has actually increased, reaching a new high of 69,382.

This has led to 91 per cent of consumers using the machines to withdraw cash at least once a month.

According to Sage Payments Payment Landscape report, consumers are looking for innovative ways to pay.

The research found that over 25 per cent of consumers said they were more likely to shop somewhere which offers a greater range of, or more innovative, payments methods.

22 per cent also said they would adopt contactless payment within the next year.

The report said: “The clear message is “this is not the time to be treading water”, yet our survey suggests that many UK businesses are doing just that. Shoppers appear to have a greater appetite for innovation than retailers and are noticing the disconnect.”

Cash is set to see an overhaul over the next years, as the introduction of a new 12-sided £1 coin is expected to enter circulation in 2015.

Plastic £5 and £10 notes are also set to be introduced by the bank of England in 2016 and 2017.