Cash will be all
but redundant by 2050 according to a report entitled The Way We
Pay 2010, published by the UK Payments Council.
The report said that cash usage in
the UK had risen by only 7% during the past 10 years while total
spending had doubled overall.
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The survey also reported that:
- Switching away from cash saves UK
consumers carrying around £102bn ($158bn) each year; - Technology is driving the decline
of cash; - Cheques have been banished from
the high street. Even without active management of their decline,
by 2018 fewer than 1% of payments will be made by cheque; - Debit card usage has risen
fourfold in 10 years, four times as fast as overall spending; - UK cardholders use a debit card on
average around 158 times per year, up from just over once a week in
1999; - Total credit card numbers and
credit card usage is leveling off; - More than three-quarters of UK
consumers hold at least one direct debit; - Over 23,000 locations accept
contactless card payments up to £15 in value. With 18bn cash
transactions below £10, there is a huge opportunity for contactless
payment to grow, and; - The Faster Payments initiative is
driving even more transactions out of the wallet and onto the
online channel.
In 2000, almost a quarter of UK
workers (22%) were still paid by cash or cheque but by 2009 this
figure had fallen below 10%. By 2018, only around one in 50 people
are likely to receive a wage cheque, even without formal moves to
end cheque use.
Although cash is
likely to decline further from today’s level, it is unlikely to
fall to zero, even in the distant future, as a small minority of
workers are likely to remain outside the banking system. By 2018,
over 95% of UK workers will receive their wages direct into their
bank accounts.
UK consumers will continue to
obtain a greater share of cash from ATMs, but will make fewer
visits than even in 1999, and the use of cash overall will
fall.
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By GlobalDataThere are now around 63,000 ATMs in
use in the UK, just under two-and-a-half times the 26,000 of 10
years ago.
The IT vendor community was quick
to identify opportunities arising from the move towards an
increasingly cashless society.
ACI head of business services Jim
Woodworth told RBI: “Our perceptions of cards and what
they can do will become much broader. In the future, more banks are
likely to move towards the development of multi-application cards,
which will be able to include authentication, transit, access to
money and identification services. The UK is likely to be at the
forefront of this revolution.”
Thales strategy manager Steve
Brunswick said: “With 22m adults now banking online [in the UK], no
financial institution can afford to be complacent…the figures
speak for themselves.”
“All banks should ensure that two-factor authentication is
provided for customers who bank online.”
