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Almost four out of 10 UK adults (39%) were living largely cashless lives during 2023, despite the number of people mainly using cash in 2023 rose to 2.6%, according to UK Finance’s latest Payment Markets Report, produced in collaboration with Accenture.
The report revealed that one third (34%) of UK adults have used mobile contactless payments at least once a month in 2023 resulting in a 7% increase in contactless payments to 18.3billion.
In total, contactless payments represented 38% of all payments made in the UK. This covers both the use of physical cards and cards loaded onto mobile phones or other devices, such as watches.
Looking specifically at mobile contactless payments, there was a marked increase in the number of people who reported being registered for mobile contactless payments (e.g., Apple Pay or Google Pay): now 42% of the adult population, up from 30% in 2022.
The report also stated that given that mobile phone penetration is above 90% in the UK, there is room for mobile contactless payments to continue to increase in usage, although that this is mainly likely to be reflected in a migration of payments from contactless cards to mobile contactless devices.
On the other hand, the volume of cash payments made in the UK during 2023 fell by 7% to 6 billion payments (2022: 6.4 billion). The number of cash payments rose during 2022 for the first time in a decade but has now fallen back to roughly where it was in 2021.
Additionally, cash accounted for 12% of all payments made in the UK during 2023, down from 14% in 2022.
Overall, cash remains the second most frequently used payment method in the UK, although that varies slightly by age.
According to the report, debit cards remain the most popular payment method, accounting for 51% of all payments made in 2023. Remote banking (online, mobile, or telephone) also remained popular in 2023, with 87% of adults using at least one form of remote banking last year.
Over the next decade, it is forecast that over 31 billion payments will be made using debit cards. Meanwhile, the number of cash payments is expected to continue the long-run declining trend seen in recent years, as consumers continue to turn to alternative payment methods.
Adrian Buckle, head of Research at UK Finance, said: “There is a huge amount of choice available to consumers in terms of how they make payments, but we can definitely see the continued popularity of debit cards and contactless. This has been driven both by consumer demand as well as new technologies which help to increase acceptance levels, particularly among small and mobile businesses.
“Mobile contactless payments are growing fast and one third of adults are now making these at least once a month, with scope for usage to increase further. This doesn’t mean we are on our way to becoming a cashless society. Cash is still the second most frequently used method of payment in the UK, although on the whole we are using it less and more people are leading largely cashless lives.”
