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Coins and Notes on the Way Out in the Plastic Revolution
By Louise Barnett

The 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 boom.

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 beyond.

“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 upturn.
By contrast, credit card payments have become slightly less popular as customers start steering clear of dearer borrowing during the recession.

“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.


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