Skip to main content Accessibility Statement
pennies in a jar

Is cash on the way out?

How do you spend your money? With last week’s launch of Android Pay and new stats today showing we’re using cards more often, it’s no longer a simple choice. Chances are you still mainly use cash, but that is about to change. 

For the first time, less than half of all transactions are now made with coins and notes. It’s predicted debit cards will beat cash as the most popular spending method within five years.

So is this the start of the end for money we can hold in our hands?

Cards vs cash

Ten years ago, we made almost two-thirds of payments with cash, but that’s fallen to less than half (45%) according to Payments UK, which represents the banks and businesses that look after the different (non-cash) ways to pay.

The decline looks like it’ll continue. By 2025, combined debit and credit card payments will account for half of all purchases, pushing cash down to just one in four payments.

How we pay

How many transactions were made by the different methods in 2015

  • Cash – 45%
  • Debit cards – 27%
  • Direct Debits – 11%
  • Credit or charge cards – 7%
  • Cheques – 1.5%
  • Standing orders – 1.4%

Source – Payments UK May 2016

Why are we using less cash?

In part, the increased card use is thanks to the rise in internet shopping, with more and more money spent online.

Contactless is also making a difference. Close to ten percent of all debit card purchases are made through the tap and pay system, and that’s expected to be fifty percent in ten years.

Going mobile

Last week Google launched Android Pay in the UK, which like Apple Pay, lets you use your smartphone with contactless readers, and use of these is also expected to increase.

One advantage is you don’t even need to have a card on you to spend money, as you use a chip in your phone handset to pay – however, you’re limited to shops and businesses which take contactless payments.

The benefits of paying with cash

There are circumstances when using cash could be the best way to pay, particularly if times are tight.

For a start, only taking the money you can afford to spend when shopping or on a night out can mean you don’t spend more than you planned.

You can also withdraw the cash you need for bills to make sure you don’t accidentally use it for something else – though you can also set up a separate account to store this money.

There are also advantages to having the exact change. You can leave money at a restaurant if you’re in a rush; you won’t get caught out trying to find a cash machine when shops, especially small businesses, are cash-only; and, despite a number of people still using cheques, cash is a great option for that last minute birthday present.

What do you think?

We really want you to share your views, but please remember to be nice ☺
All fields are required. Check out our full commenting guidelines

By clicking on 'Post Comment', you're agreeing to our Commenting Policy

  • Brian Daniel / 12 January 2018

    Is it legal to charge a fee for using contactless under £5 ? Surely this defeats the object if we are trying to move to a cashless society. I am told by the retailer that the bank charges them, so they have to pass it on.

  • David Taylor / 26 July 2016

    I totally depends on circumstances for me. During the week I only use my card as I tend to make impulse purchases if I have the cash in my pocket. However, if I'm on a night out, I NEVER take my card out anymore. It's recipe for disaster!