Cash use may be falling but it will outlive cards, says leading banking specialist

A new report by trade body, UK Finance ‘UK Payments Markets 2019’, has affirmed that cash is still the second most used payment method but that usage continues to fall. It also noted that debit cards were the most frequently used method of payment in 2018, accounting for 40 per cent of all payments.

However, Mark Aldred, banking specialist at Auriga notes that despite the current popularity of cards, we are far more likely to see the end of cards before we see the end of coins and notes.

Commenting on the findings, Mark comments: “Cash may have slipped to second place but it will outlive cards as smartphones and smart devices increasingly replace debit and credit cards in the near future. The UK Finance reports says the ability to pay via contactless is a key driving force behind the continued growth in debit card use. However the ability to pay without chip and pin is becoming even more convenient and widely available via other technologies such as mobile and smart watch, which makes purchases even quicker and easier than by card.

“Consumers naturally go for the methods that are most convenient. While just 16 per cent of the adult population are currently registered for mobile payment services, there is huge potential for growth as banks improve online and mobile banking, and start to exploit Open Banking to offer new services that let people view and access all their financial activity in one place. It therefore won’t be too long until the majority of people see mobile and smart devices as a more convenient payment method than card.

“The report also highlights that 1.9 million people still mainly use cash, with the main reason being the ease of budgeting with physical change. But, there are plenty of other reasons why the death of cash is exaggerated – just think about when EPOS systems go down in a shop, or when a bank has an outage. Cash is our universal default because it works regardless. So while technology is playing an important role in helping businesses and consumers go about their day-to-day lives efficiently and securely, cash will always remain a necessity. The idea that we will one day reach a cashless society is a myth.”