Debit Card Payments Overtake Cash Payments for the First Time

It won’t have gone unnoticed by many people that the way we make payments is changing. In 2017, debit card payments were the most common form of transaction in the UK, overtaking cash payments for the first time. According to the 2018 UK Card Payments report by UK Finance, the trade body for the UK banking and financial services sector, 13.2 billion transactions were made using a debit card over the course of the year, while the number of cash payments fell by 15% to 13.1 billion. Here, we take a closer look at the report’s findings.

Breakdown by payment type

Debit cards

The vast majority of the population (98%) now hold a debit card, with more people than ever before using them to make day-to-day payments. The ubiquity of debit cards along with the growth of contactless payments and the ever-increasing popularity of online shopping has fuelled a 14% year-on-year rise in debit card use.

There has also been an increase in the level of debit card acceptance among businesses of all sizes, but particularly smaller businesses that until recently have only accepted cash. That has helped to drive the increase in the number of debit card payments made by UK consumers overseas. In 2017, there were 1.5 billion payments made by debit card outside the UK, compared with just 88 million in 2007.

Credit cards

Despite the rise in debit card payments, credit cards continue to be a convenient and flexible tool for household spending. In 2017, the amount spent on credit cards rose by 8% to £193bn. Despite the rise, credit card repayment levels remain strong, with most people using a credit card as a means to make payments rather than borrow, often to benefit from the rewards on offer for credit card use.

The rise in credit card spending has continued into 2018. Further research from UK Finance found that in October this year, credit card transactions were up 12.1% compared with the same month last year. The trade body found that more shoppers are using their credit cards for day-to-day spending rather than one-off purchases, with the greater protection they provide and the loyalty points proving to be difficult for consumers to ignore.

Contactless payments

In 2017, the use of contactless payment cards increased by 97% to 5.6 billion transactions. Despite not being particularly popular when they were first introduced, almost two-thirds (63%) of people in the UK now regularly use contactless payments, with 3.4 million consumers admitting to relying on card payments and almost never using cash.

The growth in ‘tap and go’ or ‘wave and pay’ transactions has been built on the continued rollout of contactless-enabled devices in stores and consumers becoming increasingly comfortable making contactless payments. In fact, by the end of 2017, 72% of all acquirer-owned terminals were contactless-enabled.

Future projections

Debit cards

The UK Finance report also includes a number of projections for card payments over the next decade. It forecasts that there will be ever-greater opportunities for businesses to use debit cards to pay suppliers as an alternative to Bacs Direct Credit. There will also be growth in payments made by mobile and wearable devices without the requirement for a physical debit card, particularly among the younger generation. By 2027, the number of debit card purchases is predicted to reach 19.7 billion, representing a 49%  increase over the next ten years.

Credit cards

Credit card payment volumes are also projected to rise steadily over the next ten years for both small and large value purchases, although this will depend on economic growth. UK Finance forecasts that a broader range of SMEs will accept credit card payments, which is likely to have an impact on business-to-business payment volumes. The result is predicted to be a total rise in credit and charge card purchases from £168bn in 2017 to £180bn in 2027.


The growth of contactless payments is expected to continue over the next decade as contactless card and card readers continue to be rolled out. By the beginning of 2020, all point-of-sale terminals will be able to accept contactless payments. By 2027, contactless payments will account for 62% of all card transactions, up from 35% in 2017.

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