Commenting on the news from the Payment Council that in July 2014
non-cash payments overtook cash payments for the first time, Dave
Hobday, MD of Worldpay UK, the UK’s biggest payment processing company,
“We know that 10% of Brits don’t carry any cash on them, so if you’re only taking cash payments, that’s one in 10 potential customers who will never consider shopping with you.
“When all the recent talk is around technology making payments fast, secure and convenient, notes and coins increasingly seem like something our children will laugh about in the future.
“A recent study we conducted found 60% of 25-34 year olds would prefer never to carry cash. They want the freedom to buy what they want when they want it, regardless of whether that’s online or in a store. Cash puts barriers back up just when technology is punching a hole straight through them. Any retailer still clinging to the notion that cash will make a comeback is missing the biggest shift in the way we live our lives since the industrial revolution.”
Data from Worldpay reflects a significant shift in the way British consumers are paying for goods, with High Street credit and debit card transactions rising just over 6% in 2014, following similar gains the previous year.
Londoners are responsible for the single biggest year on year rise in card spending. Transaction volumes on credit and debit cards in the Capital have risen by 9.3% in the past year. Cosmopolitan Leeds is not far behind however, with card-based payments rising by 8.9% in 2014, while Reading (8.0%), Southampton (7.9%), and Liverpool (7.7%) are also creeping towards the cashless tipping point.
Worldpay believes a migration of low value cash payments to card, alongside increasing use of contactless are pushing the UK closer to the point where cards overtake cash as the dominant payment method on the High Street. Recent data from the British Retail Consortium suggests cash use is down by 14% over the past five years across the UK.
Worldpay’s claims are backed by its data which shows a steady decline in average transaction values for credit and debit cards, from £31.51 in 2012, to £29.67 in 2014, an overall drop of 6%. In the fast-growing contactless sector meanwhile, where the number of transactions processed has risen by 150% in the last six months, transaction values have levelled out at around £7.24, as people become more accustomed to swapping cash for plastic for their daily coffee, lunch or a few last-minute groceries. Average sale sizes in card-loving Liverpool are around the lowest in the UK at £26.51, in contrast to Leicester which has the UK’s highest average transaction value of £32.19. The Midlands city also had the lowest year on year rise in transaction volumes, just 1.95%, suggesting consumers prefer cash over cards in the heart of the UK.
Cash may not be quite done with yet, but it is clearly losing its appeal, particularly among tech-savvy Gen Y’ers. Worldpay research of 2000 consumers found the majority of Brits over 45 years old still like to have cash on them, nearly 60 per cent of 25-to-34-year-olds would prefer to never carry cash.
(Source - Worldpay Comment)