Cash now makes up less than half of UK transactions, so if you aren't maximising the ways your customers can pay digitally, you could be in trouble.
According to the Payments Council, a body that represents the payments industry in the UK, Poms now prefer paying for things digitally, instead of using old-fashioned notes and coins.
The report shows that the amount of cash payments made by consumer, business and financial organisations in the UK fell to 48% last year – a 4% decrease from 2013. As for the other 52%? It was made from cards, standing orders, internet and phone transactions, and other non-cash methods.
Cash rules the high street
Okay so the actual stats are more complex than our headline. Although cash only makes up 48% of all transactions in the UK, it's still the single most popular method of payment. Debit cards are the second most popular at 24%, with standing orders, internet and phone transactions, and contactless payments making up the other 28%.
When it comes to the checkout, however, the average consumer is still reaching for their notes and coins. UK Consumers used cash for 52% of payments last year, with figures showing higher cash use at all the places you'd expect.
Newsagents (84.8%), clubs and pubs (83.9%) and convenience stores (68%) featured the highest use of cash, in contrast to petrol stations (24.5%) and supermarkets (43.8%). Interestingly, in places where a small number of items are being paid for and the retail process is fast, people are still using cash. One exception to the rule is at petrol stations, possibly because of the increasing price of fuel – or the rise of pay-at-pump services.
Digital payment will take over – eventually
In the same report, the Payments Council warns that cash use among consumers will drop to less than 50% next year, making digital payments the most popular method of transaction for the public.
Digital payment is becoming more and more popular, and whether it's in the high street with cards and contactless payment, or in the home with online shopping, cash is losing ground.
The problem with digital
While things are looking good for digital payments, it's still not a perfect technology. Card ID theft cost UK banks £29.9 million last year, ($59 million) with card cloning resulting in a further £47.8 million ($94 m) loss.
One solution to the problem could already be on the horizon. Apple Pay will use existing Apple smartwatches and smartphones to pay for goods, and with the added security of Touch ID, it could be the next logical step for digital payments.
