Use of Debit Cards to Overtake Credit Cards by 2022
Monday, 9 September 2013
Debit card usage looks set to overtake credit cards by 2022, according to the Payments Council, who put much of the increase in debit card use down to the growing popularity of online banking apps, which give card holders greater access to management features and the ability to make contactless payments.
The Payments Council predicts that this will see people increasingly forego cash transactions and instead opting for their smartphones or other payment-enabled mobile devices. The council expects the number of cash purchases to drop by 34% a year, from £20.8bn to £13.7bn by the year 2022.
Over this period, debit card transactions are expected to grow from £7.6bn to £13.8bn and will be driven mostly by younger generations who are increasingly credit-shy.
Debit cards, and to a lesser extent prepaid cards, have already overtaken cash in terms of total spend back in 2009 when they reached £264bn, surpassing cash by £2bn. The council also predicts that non-cash payments will account for over half of all transactions by the end of 2015.
Mobile payments, although relatively new, are thought to quadruple in volume over the same time, from £356m to £1.5bn, with cheque book use declining by over 50% from £823m to 334m.
The Payments Council commented on their predictions by saying “The digital economy will continue to grow rapidly, driving change in the way payments are made and received. Much recent innovation has been around mobile payments, and mobile has the potential to make a significant impact on the payments landscape.”