It’s no secret that the landscape of the payments industry is drastically changing. It has been changing for some time. The advent of the internet and the increases in payment technology over the past decade have encouraged some methods to evolve over others. At the end of 2015, we see card payments emerge as the clear favorite, as the total revenue from which totals more that 500 billion pounds.
With almost three quarters of all transactions in the UK being processed with card payments, what can we expect in the future? Will cash become irrelevant as many tend to speculate? There are no easy answers to these questions, so for now, we can only look at the numbers.
Breaking Down the Transaction Data
The Guardian recently highlighted the massive switch to card payments, and presented valuable data on when and why consumers chose to move to using cards over cash and checks. Card spending in the UK surpassed cash spending in 2004, but it wasn’t until recently that it appeared to be the standard for nearly 75% of the country.
Some other notable information from the article explains how cards are used in the UK, along with other characteristics of average consumer spending:
- Average supermarket bills dropped by nine pounds over ten years, but the total card payment revenue from supermarket shopping doubled to 99.5 billion pounds by 2014.
- Mobile payments have contributed to the rise in card payments, with 2.6 billion pounds coming from contactless payments in the first half of 2015 alone.
- Debit cards make up just over half of all payments by card, beating credit cards by a slight margin. Experts believe this could be due to leftover caution from the 2008 financial crisis.
- There were 1.3 billion card payments in 2014, worth 119 billion pounds. That number is expected to keep growing in the coming years.
What Card Payments in the U.K. Means for Merchants
If you’re an e-commerce or retail merchant, this is undoubtedly good news. As payment methods become more convenient, people will be more likely to shop and use their money. While we can’t rule out cash or checks just yet, the growth of card payments in the UK is a positive sign for the future. Most consumers are not afraid to leave their comfort zone when it comes to spending money, and if the payment method is convenient enough—like mobile payments—it could mean extra cash for merchants all around the globe.