Digital transactions poised to leapfrog cash payments
A landmark moment for the economy could occur within weeks when economists predict that digital transactions will overtake the exchange of notes and coins for the first time.
Analysis seen by The Times newspaper suggests that the pivotal moment could be reached in the UK as early as March on the back of a surge in demand for contactless credit cards and bank transfers.
This growth has seen reliance on hard cash steadily diminish in recent years, in lock step with digital alternatives.
Illustrating this change the Payments Council calculate that 400m fewer cash transactions will be conducted this year than in 2014. Cashless payments by contrast will surge by more than 700m over the same period.
This would see cash payments slumping to 19bn by early March with the number of cashless payments hitting 19.9bn.
Mark Bowerman, from the Payments Council, said: “We anticipate this year to be first year that non-cash transaction volumes overtake cash transactions. However, we are not expecting cash to disappear anytime soon.
“It will continue to be a very popular payment method for certain types of people and certain types of situation. We make lots of spontaneous low-value payments by cash at the moment and lots of us will continue to do so.
Whilst the volume of payments may be about to flip the absolute value of cashless transactions exceeds that of cash by far greater amounts, just £251bn is expected to exchange hands as cash in 2023 – dwarfed by the £9.3tn circulating as cashless payments.