Debit cards become the UK’s number one payment method

Debit cards become the UK’s number one payment method

Debit cards become the UK’s number one payment method

It’s official, folks – cash lost its crown. With debit cards now accounting for nearly 43% of retail transactions,plastic is finally king.

According to a study by the British Retail Council (BRC), some form of card (be it debit, credit or charge) isnow used in over half of purchases, which amounted to £10.3bn of payments in 2016. At the same time, theusage of cash fell by 4.9% – a decrease largely caused by retailers’ investments in new payment technologies. The widespread adoption of contactless payment, for instance, has made it quicker and easier for consumersto use their card, even in situations where they might previously has used notes or coins.

The data suggests that, for many of us, tapping the terminal trumps rummaging around for the right change. The average value of purchases on cards is sliding down (falling from £30.53 down to £25.40 in 2013),meaning we’re using our cards for smaller, more regular purchases. This has been helped by the fact that overtwo thirds of terminals now accept contactless cards. A year ago, the figure stood at less than half.

Of course, cards also offer a convenient way to pay for more expensive items without shoppers having to worryabout carrying around a wad of cash. And the raising of limit on contactless payments from £20 to £30 in2015 has increased the range of purchases consumers use their debit cards for.

The BRC’s policy advisor Andrew Cregan, said: "A growing number of retailers have invested in paymenttechnology to accept cards, contactless payments and new payment applications both online and in store. Inpart, this has been facilitated by the Interchange Fee Regulation (IFR), which was introduced across theEuropean Union following a successful campaign by the BRC and has led to a significant fall in the cost ofcollection that benefits retailers and their customers.”

This highlights the fact that, if we’re to become a cashless society, it won’t just be down to consumer tastes orthe advancement of retail technology. Regulatory bodies will have a big part to play too. But whether they’llhold back the pace of change, or keep step with it, remains to be seen.