Debit cards were used in half of all transactions for the first time in the UK last year, trade body UK Finance said today.
The total number of payments among consumers and businesses rose to 45.7 billion in 2022, up from 40.4 billion a year earlier, the data shows, reflecting an increase in consumer spending and higher prices due to burgeoning inflation.
Consumers and businesses are now paying for products more frequently with debit cards and are less likely to pay with cash. That trend is forecast to continue to grow.
However, cash is far from dead, and the total number of cash payments made in 2022 increased despite the proportion of cash transactions as a percentage of total payments falling by one percentage point.
Cash remains the second most frequently used payment method. The number of cash payments rose to 6.4 billion transactions in the UK in 2022, up from 6 billion in 2021.
Yet, a decade ago 54% of payments were made with cash. Now that figure is just 14%, after the proportion of overall payments made using cash dropped from 15% in 2021.
Direct debit payments continued their upward trajectory, rising by 18% year over year to 23 billion payments in 2022, and the number of cash payments made each year in recent years has been steadily falling despite the slight uptick in 2022.
Credit card payments rose by 19% in 2022, up from 3.4 billion a year earlier to 4.1 billion last year.
According to the latest data, the number of contactless payments rose by 30% in 2022 to 17 billion.
Remote banking payments processed through faster payment services grew 17% to 4.3 billion.
According to the trade body a vast majority of adults, some 86%, used remote banking during the year and nearly a third of adults were registered for at least one mobile payment service.
“People are, for example, making more smaller visits to supermarkets rather than doing one large shop,” UK Finance said in a statement. “In addition, as more people work from home, purchases of travel cards have fallen significantly as people instead pay for individual journeys – therefore increasing the number of travel payments.”
Consumer payments accounted for 87% of the total payments in the study by number, despite comprising just 18% of the overall value of payments last year, with the rest of the payments made by businesses.