Mobile payments on the rise but cash decline slows
UK Finance report shows two-thirds of UK adults registered for mobile payments, while cash remains a valued option.
Stock photo for illustration only, not from the actual event
- Two-thirds of UK adults registered for at least one mobile payment service
- Cash decline is slowing, projected to reach 4% of payments by 2035
- Debit cards accounted for 54% of all payments made last year
- Over 80% of 16 to 34-year-olds regularly use mobile payments
Consumers are increasingly relying on their mobile phones to conduct transactions rather than carrying traditional bank cards, according to new data from the annual report by banking trade body UK Finance. The figures show that two-thirds of adults in the UK were registered with at least one mobile payment service over the past year, marking a decade of continuous growth since Apple Pay was first launched in the country.
While the utilization of physical cash continues its downward trajectory, the collected data indicates that this decline is beginning to decelerate, suggesting that notes and coins will remain a relevant payment alternative a decade from now. Consumers are increasingly storing debit and credit card details directly on their smartphones or smartwatches, authorizing contactless payments through facial recognition or fingerprint scans instead of entering a PIN code.
The report reveals that nine in ten mobile wallet users have set their debit card as their default payment option, with the remainder utilizing registered credit cards. This trend highlights that mobile devices are predominantly deployed for everyday purchases, with adoption rates remaining especially high among younger demographics while steadily gaining traction among older age groups.
Stock photo for illustration only, not from the actual event
"Our latest data show that the UK is now a predominantly digital economy when it comes to making and receiving payments."
The annual UK Payments Market report demonstrates that debit cards, including digital versions stored on mobile devices, served as the primary payment method last year, representing 54% of all transactions alongside 39% executed via contactless methods. Conversely, traditional cheques have dwindled to account for merely 0.2% of payments, totaling 77 million written cheques over the past year following years of decline.
The ongoing shift toward digital transactions in the UK highlights the rapid evolution of consumer financial habits. However, the slowing decline of physical cash emphasizes that digital ecosystems still cannot fully replace the tangible inclusivity and budgeting utility that physical currency provides, particularly for vulnerable populations and lower-income households who rely on cash for daily financial management.
Despite the digital transformation, UK Finance forecasts that cash will avoid total obsolescence. Notes and coins were utilized in 3.9 billion transactions, or 8% of all payments last year, a figure anticipated to halve to 4% by 2035 representing roughly two billion transactions. Nearly 50 million individuals utilized cash machines during the past year. Nick Quin from Link, the organization overseeing the UK ATM network, noted that while cash withdrawals are falling nationwide due to the convenience of digital wallets, millions still rely on cash daily, particularly lower-income individuals who depend on physical currency for strict budgeting.
Source: BBC Business
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