News & Views - Savantor

Debit card transaction volumes overtake cash sooner than predicted

Monday, 16 July 2018

The latest report produced by UK Finance, ‘UK Payment Markets 2018’, identifies the most recent trends affecting all types of payments in the UK, as well as providing forecasts for the next ten years.
According to the report, 38.8 billion payments were made in the UK in 2017.
What is of particular interest is that during the last quarter of 2017, debit card usage overtook cash usage for the first time as the most frequently used payment method in the UK. Apparently this was several months earlier than previously predicted by UK Finance - the forever increasing popularity of contactless is thought to be mostly responsible for this.
The majority (98%) of UK consumers now hold a debit card; in 2017 there was a 14% increase in debit card transactions compared to the previous year, up to 13.2 billion debit card payments for the year.
Credit card transactions saw a similar percentage growth (13%) over the previous year, to 3.1 billion payments in 2017. However credit cards are held by less than two thirds of the population, with only 64% of consumers in the UK holding a card.
Over the next ten years, debit card payment volumes are forecast to grow by more than any other payment method, increasing by 49% to 19.7 billion payments in 2027. Contactless payments will help drive this, together with the continuing popularity of online shopping as well as increasing card acceptance amongst all businesses and in particular small businesses wanting to enjoy the growth in contactless usage.
Credit card volumes are also predicted to increase, reaching 3.9 billion by 2027. The growth in credit cards is forecast to be very much tied to the state of the economy and how much consumers are prepared to take on unsecured debt.
The number of contactless payments made in the UK increased by 97% during 2017 to 5.6 billion payments. By the end of 2017 there were nearly 119 million contactless cards in circulation in the UK with 78% of debit cards and 62% of credit cards having contactless functionality.
Cash payments continued to decline in 2017, falling by 15% to 13.1 billion payments. However, this still means that cash was used for over a third (34%) of all payments and was the second most frequently used payment method, just behind debit cards. The increasing use of debit cards, in particular contactless, is seen as the main cause for the decline in cash as a payment method.
During 2017 there were 3.4 million consumers who virtually did not use cash at all, yet there were also still 2.2 million consumers who predominantly used cash when shopping.
Whilst the number of cash payments is expected to continue to fall over the next 10 years, as a payment method it is still forecast to account for 16% of all payments, remaining the second most frequently used means of payment.
To summarise, changes in consumer preferences, innovation in payment methods and technological developments have caused significant changes in the UK’s payment market over the last decade and had a considerable impact on consumer payment behaviour. Rather than it becoming cash-free over the next decade, the UK seems to be developing into a market where cash is becoming less important than it once was, but nevertheless remains the payment method of choice for many.

Savantor Services

Savantor Services

Savantor services are tailored to Client needs based on our core service areas

Specialist Resourcing Payments Strategy Platform Transition Operational Efficiency
Savantor Services

Job Opportunities

Consulting and contracting roles in the payments, mobile and banking arena within the UK and across Europe

View more
Savantor Services

Savantor Views

Find out more from our Savantor brochures, MarketEye back copies and Industry opinion

Collateral Market Eye News & Views Sign Up to receive MarketEye

Client Quotes

Complex Multi-Country Migration

"This complex migration, undertaken simultaneously in Spain and Portugal, has been a complete success. Savantor has provided us with excellent support for over 3 years, both in the original business transformation programme and now this double migration. We value their open and honest approach to business, and of course the expertise that they bring."

Ricardo Gomez, Director, Operations & Technology - WiZink Bank – Spain & Portugal

Acquirer Specialist Support

"OP-Pohjola Group has used Savantors help in numerous different specialist projects differing from risk assessment to management tool creation to transaction analysis. We have been very satisfied by the quality of the service provided by Savantor's experts."

Kai Lindstrom, Head of Acquiring - OP-Services Ltd - Finland

Acquirer Risk Assessment

"The expertise provided by Savantor has greatly helped us evaluate our risk position and to take the right steps in managing our future risks. Strong, disciplined planning and an ongoing willingness to work closely with our staff played an enormous part in making this a very successful well-delivered project which will greatly help us in achieving our business goals."

Mark Healy, Chief Risk Officer - NEOVIA Financial - UK

Expert Witness

"After searching extensively for the required industry expert in a complex litigation, Savantor was identified to have the necessary industry knowledge and expertise on a range of complex issues. Savantor provided clear advice and was able to quickly hone in on the key issues, but most importantly, generating pragmatic winnable answers."

Gavin Ingram, General Counsel & VP Strategic Planning - Global Blue - Asia Pacific

Interchange Review

"Savantor did a superb job in confirming what we believed was an area of weakness. The detail we now have will enable us to agree internally what we need to do to improve structure, control and income. Nationwide management were very impressed with the quality of the Savantor team."

Adam Slater, Senior Manager - Banking - Nationwide Building Society - UK

Card Processing Migration

"Disciplined methodology and effective teamwork, guided by Savantor's migration expertise and operational knowledge, were the hallmarks that led to the resounding success of this project, enabling us to maintain and develop our business capability."

Robert Lambert, Head of Cards Strategy - Permanent tsb bank - Ireland

Market Insights

"Savantor did a good job in helping us understand the dynamics of a key growth area for Trionis. Savantor's ability to listen and their degree of commitment have always impressed me. They have been of great help in providing us important market insights and I would not hesitate to work with them again in future."

Ernst Verbeek, Managing Director - Trionis - Belgium

New Fuel Card Guidelines

"Savantor successfully assisted Clear2Pay by providing specialist EMV expertise."

Marie Costers, General Manager - Clear2Pay Open Test Solutions

Clients - Request Support

Send us a support request and one of our specialists will be in contact to assist you.

Consultants – Upload your CV

Register your CV with us and gain access to a range of job opportunities through our online job search portal.