News & Views - Savantor

UK Payment Predictions

Friday, 09 October 2015
In the past week, Payments UK has released the results of research into predicting future payment volumes. Key predictions include the increase of card payment volumes by 66% from 2014 to 2024; that online/phone (Faster Payments) volumes will more than double; and that consumer cash payments will reach 12.6 billion per annum by 2024. Overall, it is forecast that an all-time record of 44 billion payments will be made in 2024, up 3.4 billion over 10 years, equating to 120 million payments per day. The research behind these predictions attributes the increase to rises in card, internet and mobile banking payments, with the most significant increase in debit cards at the expense of cash as consumers opt increasingly for debit card contactless payments. The growth in debit card volumes will also come from increasing e-commerce usage. In 2014 debit card payments represented 26% of consumer payment volumes; by 2024 it is predicted this will rise to 42% of consumer payment volumes, equivalent to an average of 282 debit card payments per person. By 2016 it is forecast that the total volume of all consumer non-cash payments will exceed the volume of cash payments for the first time, although if both consumer and business payment volumes are combined, non-cash payments overtook cash payments in July last year. In 2014, the total volume of debit and credit cards payments combined equated 51% of the volume of non-cash payments, but by 2024 it is predicted they will account for 60% of non-cash transactions, with the volume of debit card sales growing from 9.2 billion in 2014 to 16.0 billion in 2024. Both cheque and cash payments are predicted, unsurprisingly, to decline. In 2014 cheques only accounted for 1.1% of the volume of consumer payments and are forecast to decline to 0.4% by 2024. Cash, which accounted for 53% of consumer payment volumes in 2014, is also set to decline to 33% by 2024. In terms of number of payments, it is forecast there will be 12.6 billion consumer cash payments in 2024, indicating a decline of 30% compared to the 18.1 billion consumer cash payments in 2014. Whilst the predicted trends of the various payment methods and types are probably not surprising and may confirm the views of many involved in the payments industry, nevertheless it is interesting to see actual volumes forecast over such a long period, as predictions are easier to make in the short term but more difficult to hone over a longer period. With the market continuing to evolve and develop at an ever- increasing pace it will be intriguing to see how the forecast volumes from this research compare to the actuals by 2024.
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