Coins and Notes on the Way Out in the Plastic
By Louise Barnett
reign of cash as king is over with coins and
notes expected to be used for fewer than half of
all payments within the next five years.
Paying by plastic is eclipsing hard cash,
according to latest industry data showing that
debit cards in particular have seen a popularity
Meanwhile cash payments slumped from nearly
three quarters of all UK transactions to just 59
per cent over the past decade.
The Payments Council, which represents banks and
other big finance firms, predicts the demise of
cash will continue over the next five years and
“By 2050, using cash could well be a minority
activity, much more the preserve of informal
transactions,” a council spokesman said.
But Ron Delnevo, boss of ATM operator Bank
Machine, disagreed, saying: “For proven reasons
such as ability to manage budgets, transparency
and authenticity, the public have shown that
cash is still king.”
The findings come just days after high-street
lender Nationwide announced plans to ban cash
withdrawals of sums lower than £100 over the
counter in a bid to tackle queues in branches.
Charities representing pensioners objected to
Nationwide's bid to encourage greater use of
cash machines, saying some elderly would feel
vulnerable using the hole in the wall to take
out relatively large sums.
Latest Payments Council data shows that debit
card spending quadrupled between 1999 and 2009
to become the most popular form of payment at
around £264billion last year. Spending on debit
cards is forecast to almost double again to
£477billion by 2018 – meaning they will be used
for around one-in-four of all transactions. Just
under 80 million debit cards were in circulation
last year compared to 46 million a decade
^earlier, another sign of this popularity
By contrast, credit card payments have become
slightly less popular as customers start
steering clear of dearer borrowing during the
“This reflects both consumers opting for cheaper
secured borrowing, particularly in the late
2000s, and credit card issuers increasingly
operating tight lending criteria,” the Payments
Council report explains.
Check payments stood at around 577 million
transactions last year but the council is
planning to kill off Checks entirely in 2018
because of a predicted demand slump. It expects
Check usage in the UK to plunge to 248 million
transactions by that date, equal to 0.8 per cent
of all personal payments, if no action is taken
to wind up the Check clearance system and render
the payment method obsolete.
“By 2050 when today’s new workers have retired,
Checks look set to be a historical curiosity,”
the report adds.
But the industry’s planned end date for Checks
has provoked outcry from business groups who say
this payment method is still extremely popular
with small firms.
And a cross-party committee of MPs last month
accused the Payments Council of signing a death
warrant for Checks by forcing them into terminal
decline, regardless of whether or not customers
still wanted them.
The Treasury Committee said finance chiefs
appeared to be forcing Checks into extinction by
imposing their planned 2018 end date.