For The First Time, Debit Card Payment More Popular Than Cash

23/06/2018

As more people are moving away from paying with cash and into contactless payment system, debit cards have become more popular than cash for the first time.

Most of the purchases made without cash, have increasingly been made using contactless technology, which allows cards placed on or near a reader to transfer payment from a consumers' account to the seller. This payment method is a key factor in debit card payment growth

A total of 13.2 billion debit card payments were made in 2017. This is a 14 percent increase if compared to 2016, according to a trade association. This number surpassed the 13.1 billion cash payments made, as the use of notes and coins dropped by 15 percent.

It was estimated that in 2017, 3.4 million people hardly used cash at all.

Debit cards

Most of the time, these contactless payments were used in supermarkets.

Consumers who use contactless payment, were mostly aged between 25 and 34. These people were also those who are most likely to shunned cash entirely. On the other hand, people aged 65 or older are less likely than younger people to make contactless payments.

The report showed that debit cards have overtaken cash faster than the industry has expected. But still, notes and coins are still having an important role to play. This is especially true since many traditional markets in developing nations don't have contactless readers nor accept debit cards.

Cashless payments are also prone by IT failures, making consumers vulnerable.

What's more, cash has the essence of being untraceable. This is a total opposite to cards or any other method of transactions as they leave digital footprints.

Economists said that the move away from cash could help create a more fintech-based society, which means transactions using cryptocurrency could become more widespread and accepted in the mainstream.