One of the UK’s leading retail banks, Halifax has announced that through new data it is clear that cash and check use by UK consumers is falling sharply, with only 15% of all checking account transactions made using these traditional payment instruments. Citing the rise of new payment technologies like contactless, online and mobile banking and ‘pay a contact’ services such as Paym, traditional payment instruments are struggling to remain popular.
According to the data released by Halifax, debit card transactions now account for 56.7% of all Halifax current (also referred to as checking) account transactions, up from 54.9% in 2013 whereas cash withdrawals now make up only 16.6%, down from 17.9%, and checks only account for 1.2%, down from 1.5% in 2013. Furthermore, cash withdrawals now account for just £18.33 ($26.76) of every £100 spent, a £1.82 ($2.66) decline since 2013.
Nick Young, head, current accounts, Halifax commented on the data by saying,
“This trend away from cash is likely to go on as banks innovate and provide customers with more convenient ways to pay for their goods and we continue to see the rise of new, non-traditional entrants into the payments market. Consumers now have much more choice regarding payment methods and have adjusted their spending habits accordingly.”
The declining use of traditional payment instruments in the UK is not particularly surprising; data from the past few years has shown that these forms of payment have been on the decline. While one can expect the consumer use of these payment instruments to continue to decline, there will always be an element of the consumer base interested in using traditional payment instruments (particularly cash).
Overview by Tristan Hugo-Webb, Associate Director, Global Payments Advisory Service at Mercator Advisory Group
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