UK takes ‘pick n mix’ approach to payments

Written by Peter Walker
07/06/2019

UK consumers are taking a ‘pick n mix’ approach to how they make payments, with mobile banking, mobile payments and contactless all becoming increasingly popular, according to research by UK Finance.

Its latest survey found that almost half (48 per cent) of UK adults used mobile banking in 2018, up from 41 per cent the previous year. The number of bank payments made using online or mobile banking in 2018 grew to two billion, up from 1.6 billion in 2017, as consumers and businesses increasingly choose to bank using their phones, tablets or computers.

By the end of 2018, an estimated 8.5 million people were registered to buy goods and services using mobile services such as Google Pay, Apple Pay and Samsung Pay. This means that one in six (16 per cent) of the adult population are now registered for mobile payment services, up from just two per cent in 2016.

Having overtaken cash in 2017, debit cards remained the most frequently used payment method in 2018, accounting for nearly 40 per cent of all payments. Almost the entire adult UK population (98 per cent) now own a debit card and by 2024 debit cards are forecast to account for half of all payments in the country. The continued increase in debit card use has been in part driven by the growing popularity of contactless payments, which rose to 7.4 billion payments in 2018, an increase of 31 per cent on the previous year.

The figures also showed that older customers are increasingly embracing the convenience of this technology, with 61 per cent of over-65s making contactless payments in 2018, up from 50 per cent in 2017. Overall, 69 per cent of adults in the UK now use contactless payments, with no age group or region falling below 58 per cent usage.

Cash remains the second most frequently used payment method in the UK. It was used for 28 per cent of payments in 2018 and is forecast to still be used for one in ten payments in a decade’s time.

However, the growth in contactless and mobile payments has meant consumers are choosing to pay less with cash, with overall cash payments falling by 16 per cent in 2018 and one in ten adults (5.4 million consumers) opting not to use cash at all.

UK Finance is working with the recently established Joint Authorities Cash Strategy Group to help ensure cash continues to be available to those who need it.

Chief executive Stephen Jones commented: “More and more customers are now opting for the speed and convenience of paying with their contactless cards, or using mobile banking to check their balances and make transfers while on the move.

“This rapid rate of technological change is set to continue over the coming decade, as people embrace the ever-widening number of ways to pay and manage their finances, depending on their needs and lifestyle,” he continued, adding: “However, technology is not for everyone and cash remains a payment method that is valued and preferred by many, so maintaining access to cash will be vital to ensure no customer is left behind.”

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