The way we pay

Over the last ten years there has been a major shift in the pattern of cash acquisition in the UK, according to a new report by APACS, the UK payments association.

'The Way We Pay 2007: UK Cash and Cash Machines' reveals that the proportion of cash demands met by cash machines has nearly doubled over the last 10 years to 65% in 2006 compared to only 34% in 1996.

Over the last ten years the total number of cash machine withdrawals has grown from 1.6 billion in 1996 to 2.8 billion last year, with the amount of cash dispensed more than doubling from £80 billion to £180 billion.

The figures show that other card-based cash withdrawals such as through debit card cashback and counter transactions have also grown over the decade, meeting 12% of personal cash needs in 2006 compared to just 8% in 1996.

Meanwhile, the acquisition of cash through non-bank channels such as wages and state benefits and via cheque and passbook withdrawals from accounts, has diminished significantly from 61% of all cash acquired in 1996 to just 23% in 2006.

The report goes on to reveal that cash machines will dispense an increasing proportion of all personal cash acquired, reaching 81% in 2016, with £220 billion expected to be paid out. All other forms of cash acquisition are expected to account for a smaller proportion of cash acquired in 2016 than they did in 2006.

Sandra Quinn of APACS says cash currently accounts for 63% of all the payments we make, however looking forward, the total demand for cash in value terms is projected to see a very modest decline over the next 10 years, due to the increasing popularity of non-cash payments, in particular developments like contactless cards.

In 2004 spending on cards overtook that of cash, and 2014 is expected to be the first year when there will be more non-cash payments than cash payments.

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2007-05-21 10:14:10 © Moneyextra.com