Report states that cash is still king, but for how long?

• 71% of all cash acquired by consumers came from cash machines. 2.9 billion cash machine withdrawals were made last year - equivalent to 91 withdrawals per second
• Cash payment volumes are forecast to fall by 27% over the next 10 years
• If current trends persist, next year for the first time debit card spending will overtake cash spending by value

The payment industry’s latest publication, The Way We Pay 2009: UK Cash & Cash Machines provides the latest data on how UK consumers are obtaining and using cash and how this is forecast to change. The full Payments Council report issued this month (June 2009) includes data from Link and other industry sources.

Whilst cash spending continues to remain relatively flat, the number of cash machine withdrawals continues to rise and is forecast to peak in 2011. Consumers are increasingly using cash machines for withdrawing cash, where previously they would have withdrawn money in bank branches or at post offices; five years ago only 54% of cash came from cash machines, last year 71% of cash was acquired that way. This shift has been driven by an increase in the availability and numbers of cash machines as well as the migration of payment for state benefits and pensions to automated methods.

The report also reveals that in 2008 consumers made 22.4 billion cash payments, amounting to a total value of £267 billion, and that UK cash machines paid out £192 billion in 2.9billion transactions.  By contrast, in 2008, debit cardholders made 5.5 billion purchases and spent £247 billion on their cards. Although consumer cash spending still amounts to more than that by any other single payment method, this may not remain the case for long - in 2010 consumer debit card spending is forecast to outstrip cash spending by value for the first time*.

Edwin Latter, scheme director of Link said:

"The report provides a clear picture of the nation’s usage and acquisition of cash, revealing how often we withdraw cash as well as the types of places where we make cash payments and what we buy there.  For example, two-thirds of cash payments, by volume, last year were made in shops, and 5% of all the cash payments spent there were on entries to the National Lottery.

"Even though the report predicts that cash transactions by value could be overtaken by debits cards for the first time next year, no-one is claiming that the end of cash is nigh. By volume cash still remains king, and will remain so until a viable alternative for low value transactions is widely available.”

A complimentary copy of The Way We Pay 2009: UK Cash & Cash Machines is available to journalists on request, but for information on how to order a copy, priced at £250, and for details of other publications available to purchase, please visit our publications section.

ENDS

For any other enquiries, please contact the press office on 020 7711 6316 or press@ukpayments.org.uk

Notes to editors:

* on 29th December 2004 total spending on debit, credit and charge cards exceeded cash for the first time (£269 billion against £268 billion)

Some additional facts and figures from The Way We Pay: UK Cash & Cash Machines 2009:

• In 1998, 80% of payments were made by cash, as opposed to 66% last year.
• Of the total 22.4 billion cash payments made last year, 13.9 billion were for payments of £5 or less.
• In 2008, 98% of adults were cash users.
• In the UK, by the end of 2008 there were 63,916 cash machines, 97% of cash withdrawn was from free-to-use cash machines.
• In 2008 there was a small increase in the per machine average amounts of cash withdrawn from bank and building society machines, whereas the average amounts of cash withdrawn at independent cash machines fell by 3.2% last year.
• In 2008 cash machines paid out £192 billion – equivalent to £6,094 per second.
• The use of debit card cashback remains limited and, in fact, has fallen for the last three years, with £6.7 billion paid out in cashback last year as opposed to £7.2 billion in 2005.
• 9,750 mini-statements were printed at each cash machine offering the service last year.
• In 2007, the Irish and British made the most cash machine withdrawals per head when compared with other EU nationalities.