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Mobile, Internet banking to drive decline in cash use
Mobile payments and Internet banking will drive up the use of bank cards in the UK, according to a new forecast released by the UK Payments Council, but cash isn't dead yet.
The UK Payments Council's latest report forecasts what the payments industry will look like in 10 years time. Overall, it predicts that card use by consumers will hit 17 billion in 2022, up 75% on last year's 10 billion.
Meanwhile, the number of cash transactions is forecast to fall from 21 billion to 14 billion in 2022, with use of cards and mobile payments on the rise.
The changes in bank card behavior will, in part, be driven by mobile payments and internet banking, says the UK Payments Council, up from 356 million payments in 2012 to around 1.5 billion by 2022.
While the report doesn't cast doom on the survival of cold, hard cash, it does show how non-cash transactions become dominant by 2022. By that year, the total of non-cash transactions, 22 billion (17 billion in cards, 1.5 billion via smartphone / Internet and 3.7 billion via direct debit), will greatly exceed that of the forecast 14 billion cash transactions.
Another payment method could also continue on past 2022, particularly among older age groups. When the UK Payments Council proposed the phasing out of paper checks by 2018, they were subsequently pressurized by pensioners into backing down. The use of checks is forecast to show significant decline - by 2022, the Payments Council predicts 341 million transactions (186 million by consumers), a far cry from last year's 848 million checks used.
"It's fascinating to see how much of the groundwork we're laying down now will work out in 2022. The next few years will be an exciting time for the payments industry," said Adrian Kamellard, Payments Council Chief Executive. "Over the coming decade we will see major innovation with the introduction of our Mobile Payments Service in 2014, the Current Account Switch Service next month and of course all the innovations brought to market by individual players within the payments field."
Image via Shutterstock
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