Can you remember the last time you paid for something with cash – other than a paper or chocolate bar at the corner shop? You’ve probably not done a proper supermarket shop using just physical money in a long time, as sticking it on your debit or credit card is much more common now.
Research*carried out for us found that 44% of Brits were carrying less than £10 in cash when we asked them, and according to another report, we’re all using cash less frequently to pay for things. In 2014, coins and bank notes made up just over £18 of every £100 that we typically spent. Debit cards are now the most widely used method of payment, accounting for almost £30 in every £100.
Digital payments take the lead
In 2013, £20.15 of every £100 spent was cash, showing that physical payments are starting to decline. In contrast, ‘faster payments’ now make up £15 of every £100, up from £12.42 two years ago. Faster payments are those made through internet banking and mobile devices, meaning we’re beginning to embrace more hi-tech ways to pay.
Cheques are still refusing to die completely though, as they account for £8 of every £100 spent. This is mainly due to them being used for high-value transactions though, as cheques are only used for around one in every 100 transactions. They’ll probably stick around for a few more years yet, as they’re still popular among the older generation who are unsure about newer forms of payment.
What happens next?
So is this trend likely to continue? Will we see people making even fewer physical payments in the future? According to the research, 84% of those polled say they expect to use less cash in the next 12 months. One reason for this could be the more convenient methods of payment currently being developed by technology companies, not just banks and account providers themselves.
Apple Pay is may be a driving force behind this, as the brains behind the iPhone have come up with a new way for you to pay through your smartphone using your fingerprint. It’s currently only available for people with an iPhone 6, 6 Plus, or the new Apple smartwatch, and you can’t use it in the UK just yet, but it’s expected to launch here later in the year. It means that iPhone users will be able to make payments just by holding their phones near the contactless reader. Okay, so we might not all be able afford the newest iPhone, but it’s only a matter of time before this technology rolls out to other providers!
Contactless technology in your debit or credit card could mean that you’ll be more likely than ever to use your card to pay for shopping. This clever development means you don’t have to put your PIN in when you’re buying goods for under £20 in some shops – you can just touch your card to the contactless scanner. The limit for contactless payments is going up to £30 from September, so you’ll be able to use it more than ever.
New technology means you can now pay your mates using their mobile number. If your bank is a member then register on Paym and you’ll be able to send payments without needing your friend’s bank details, as long as they’ve signed up too.
According to the World Payments Report 2014, mobile payments are expected to grow by a massive 60% in 2015, so by this time next year, we could see a big shake-up in the amount of faster transactions we make. Cash might not be going away just yet, but it certainly doesn’t have the hold on our payments that it once did.
*OnePoll questioned a nationally representative sample of 2,000 adults aged 18 and over between 6th June and 16th June 2014, of whom 500 were Scottish residents.