U.K. consumers made 13.2 billion debit card payments in 2017 compared to 13.1 billion cash payments, according to new research published Monday. This represents the first time that debit card payments have overtaken cash as the U.K.'s most frequently used payment method, trade association U.K. Finance said.
Online shopping, smartphones and contactless payment technology have all played a role in this shift, with the latter's popularity described as a "key driver of debit card growth."
The number of contactless payments – for both debit and credit cards – grew by 97 percent last year, reaching 5.6 billion, with 63 percent of people in the U.K. now using the technology, which allows payments to be made by touching a debit or credit card on a reader.
At the end of last year, almost 119 million contactless cards were in circulation, with 78 percent of debit cards having a "contactless functionality." For credit cards, this figure was 62 percent.
By contrast, payments made using cash dropped 15 percent last year, although it still remains the second most frequently used form of payment behind debit cards. Over the next few years, debit card payment volumes are seen growing by 49 percent to hit 19.7 billion payments in 2027. Contactless payments will account for 36 percent of all payments in 2027.
"The choice of payment options available in the U.K. is allowing people to choose to pay the way that best suits them," Stephen Jones, the chief executive of U.K. Finance, said in a statement.
"But we're far from becoming a cash-free society and despite the U.K. transforming to an economy where cash is less important than it once was, it will remain a payment method that continues to be valued and preferred by many," Jones added.