Cashless payments taking over - almost
THE number of transactions carried out using cashless methods has overtaken the number using coins and notes for the first time, the Payments Council says.
Half of all transactions made by businesses, financial organisations and individuals in 2014 were carried out using an electronic form of payment - and remarkably, cheques still account for 2% of payments.
But among individuals, physical money is still king - 52% of personal transactions carried out last year used cash, and 91% of us still visit an ATM at least once a month.
In fact, consumers accounted for 99% of the 18 billion cash transactions made in the UK in 2014.
Unsurprisingly the bulk of cash payments are for smaller amounts, or made in places where cards and other forms of payment still aren't as convenient.
For example, 56% of cash transactions are for £5 or less, and more than 80% of transactions in pubs and clubs, and in newsagents, are still made using actual money.
SOURCE: Payments Council, UK Cash & Cash Machines Summary 2015. Available here [pdf]
But over the past 10 years the number of payments of £1 or less has dropped by 50%.
That's partly because of inflation - nipping out to buy the newspaper and a pint of milk costs more these days - but it's also in good part because of the mobile phone.
A decade ago phone boxes were far more numerous, as were coin-gulping parking meters and ticket machines.
But these days even parking meters offer us the chance to pay using our mobiles and a credit or debit card, while ticket machines often accept cards - and using a phone box to make calls is now something of a rare, expensive, and often inconvenient habit.
While no one's saying cash will be a thing of the past any time soon, there are indicators to suggest that it'll be far less important to us in the future.
In 2004, 71% of consumer transactions used cash; compare that with 52% last year, and a predicted 34% by 2024.
Only 1.6 million people - 3.1% of adults (16 and over) - say they predominantly use cash. Almost 40% of this group are aged 65 or over, with roughly another 23% aged between 55 and 64.
Meanwhile all those aged between 16 and 44 who say they rely on cash account for just over 20% of this group.
It's more likely that people will say they hardly ever use real money any more - although not by much, with 2.3 million of us - 4.4% of adults - saying so.
That's lead the Payments Council to suggest that the volume of money floating around the UK will fall by almost a third over the next decade - although, again reflecting the role of inflation, the value of those coins and notes won't drop by anywhere near that much.
It's reckoned that while there's around £253 billion sloshing about in pockets and wallets at the moment, in 10 years' time we'll still be carrying a total of £245 billion around with us.
And it's likely we'll still be using cash machines to get our hands on the bulk of that money. There are now more than 70,000 ATMs in the UK, more than 50,500 of which are free to use.
As mentioned above, 91% of us used a cash machine at least once a month last year - that's 47 million adults using a hole in the wall to get hold of an average of £67 per withdrawal.
The average amount requested in cash back is just £25.
SOURCE: Payments Council, UK Cash & Cash Machines Summary 2015.
Note that larger withdrawals and the cashing of cheques tend to happen over the counter.
The demise of the cheque has long been forecast, but it's still a vital part of the financial life of many people - and there's an obvious overlap between those who tend to use cheques, and those who rely on over-the-counter services.
But transactions such as these could become more difficult.
The agreement between the Government and the big banks not to close "the last branch in town" is set to expire at the end of this year, although Lloyds Bank have already pulled out with the announcement last autumn that 150 branches were to close.
Before the election, the Government and banking industry reached a compromise regarding what happens when that agreement ends.
The deal means the last branch in town may well disappear - but only if there is still an alternative means of banking available, which the departing banks ensure their customers know about.
For those who don't have access to online banking and mobile apps, that will probably mean the local post office.
It's "an ideal shared service for customers who prefer to use counter services", according to British Banking Association chief executive Anthony Browne, who also said the deal would ensure "the right support to help customers use internet or mobile banking."
Even the cash is plastic
In the meantime, even the money's getting more high-tech.
In 2016, the Bank of England will begin issuing polymer - plastic - banknotes, starting with the humble fiver and extending to £10 notes in 2017.
Polymer notes are already being used in more than 40 other countries, and they're shown to last longer, stay cleaner longer, and be more difficult to counterfeit.
They won't be the UK's first polymer notes though; in March Clydesdale Bank issued two million plastic £5 notes to mark the 125th anniversary of the opening of the Forth Bridge.
Onstride Financial estimate the lifespan of the average £5 note to be less than two years long; a standard £10 is removed from circulation after three years, and a £20 can last almost 10 years.
It's thought the polymer versions will last twice as long - so there's another reason we shouldn't be too quick to bid farewell to the idea of cash payments.
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