Plan B Forum

Coins and notes will be used in less than half of all transactions within five years, it has been predicted, after payments made by cash fell from 73 per cent to 59 per cent over the past decade.

The Payments Council said that cash was “king no more” after a study of payment trends between 1999 and 2009 found debit card spending was now the most popular — quadrupling to £264 billion last year.

Debit card payments are even dwarfing credit card usage, while the cheque continued its decline, and at a faster pace than expected.

The council said it predicted in 1999 that just over one billion cheques would be used by individuals in 2009, but the figure fell to 577 million.

It is planned to phase out cheques completely by October 2018, although the council said that even if no action was taken, cheque transactions would more than halve to 248 million in that time, making up only 0.8 per cent of all personal payments made.

“By 2050, when today’s new workers have retired, cheques look set to be a historical curiosity,” it said.

The future instead looks set to be contactless cards, which allow people to pay for goods worth up to £15 without having to use a PIN.

There are eight million cards in the UK that allow contactless payment, but the council estimates that this will grow to 30 million by 2012.

And mobile phones are likely to be used eventually for payments, with an iPhone application already making this possible.

“By 2050, contactless could well be the norm, but it is unlikely to be on a plastic card and could very well be on a mobile phone,” the report from the council said.

Although cash is now being used less, it remains the most important method of payment for one-off and small transactions.

Today’s study showed that about 21 billion consumer payments were in cash, but the vast majority of these — 80 per cent — were below £10.


http://www.timesonline.co.uk/tol/money/ ... 096843.ece