Cash Still King, But Contactless Looms
Cash remains the most popular way of making small payments, with 96 per cent of all spending under £5 done with notes and coins.
Sandra Quinn, director of communications at payments industry body Apacs, which carried out the research, said despite the consumer's continuing love affair with cards, cash remains the first choice for small value payments. But she said this may all change with the arrival of contactless technology on cards.
Cash accounts for nearly two-thirds (63 per cent) of all day-to-day payments, with the £20 note being the most popular denomination of them all € accounting for 66 per cent of all notes dispensed by UK cash machines in the last quarter of 2006.
A £20 note featuring the face of economist Adam Smith launched today to replace the portrait of composer Edward Elgar on the paper money.
But over the past 20 years the number of cash transactions has continued to decline € as the number of people regularly paid in cash has continued to fall. One in three workers was paid in cash 20 years ago, whereas today only six per cent are paid this way.
The move from cash to cards has been rapid - in 1999 the UK spent £100bn more via cash than on cards but in 2004 card payments overtook cash by value for the first time, according to Apacs.
Quinn added the UK has been using notes for more than 300 years and will continue to do so in significant amounts for a long time to come.
This is in contrast to Visa Europe's chief executive who recently predicted we would be living in a cash-free society by 2012.
David Birch, director at consultancy Consult Hyperion, told silicon.com society will eventually end its love affair with cash and embrace technology - as in Japan where mobile phones, not bank cards, are replacing coins and notes.