19 April 2006
Evidence has emerged that the way in which people are using their current accounts is changing, as more people are making payments using debit cards.
Figures released by the UK payments association Apacs suggest that for the first time, more retail spending was completed with a debit card than with cash in 2005.
A total of 37% of all retail spending was processed through a debit card, with cash accounting for 34%. That amounted to £89 billion spent on debit cards, £7 billion more than in 2004.
"At the end of 2004, we saw total UK spending on plastic overtake cash for the first time, signalling a real sea change in our payment habits," said Sandra Quinn, director of communications at Apacs.
"The 2005 figures show that this trend is continuing with debit card spending in retail outlets crashing through the cash barrier for the first time ever.
"There are many reasons behind this continuing trend to pay by debit card, and one of the reasons is that more businesses are accepting cards."
She argued that the increase in debit card usage could be generational.
"Debit cards have been around in the UK for almost 20 years so we now have an entire generation of shoppers who readily delve for their debit card instead of cash," she added.
The combined retail figures of spending on credit and debit cards continued to increase. It accounted for 63% of all retail spending in 2005, up from 60% in 2004.
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