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Cash holds sway over cards

Lisa Vaughan
Thursday 05 August 1993 18:02 EDT
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CASH STILL reigns supreme in Britain, despite the increasing popularity of debit cards for everyday payments, writes Lisa Vaughan.

With notes and coins accounting for two-thirds of all payments of more than pounds 1 in 1992, predictions of a cashless society are premature, says the Association for Payment Clearing Services, the bank and building society group that oversees UK payments. Its use will decline only slowly until the year 2000.

But transactions using debit cards - which allow the deduction of funds directly from a current account - jumped sharply as people increasingly substituted them for cheques in retail outlets. Last year, debit card transactions rose 45 per cent to pounds 522m. Debit cards account for 1.5 million transactions a day.

Apacs said: 'The significant further scope for use of debit cards as a substitute for cheques, combined with additional migration from cash and credit cards, is expected to lead to nearly 2.5 billion payments per year by 2000.'

The use of cheques fell for the second year running, by 4 per cent, and is forecast to continue declining for the rest of the decade. But at 3.6 billion cheques in 1992, they remain second only to cash as a payment method.

Apacs said that, aside from debit cards, the growth of other automated payments and plastic cards has slowed from the 1980s. The number of credit card payments, static in 1991, grew by 3 per cent in 1993 to 800 million transactions. Faster growth of 4.5 per cent is expected up to the end of the decade.

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