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19 April 2006
Spending on debit cards has overtaken spending on cash for the first time.
Consumers are increasingly choosing the convenience of plastic over cash when making purchases, with debit cards accounting for 37 per cent of retail spend in 2005 and cash accounting for just 34 per cent.
The figures, from UK payments association Apacs, show that debit card retail spending hit £89 billion last year, up nine per cent from 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.
"This change was mainly driven by debit card use. 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."
With debit cards having been around for 20 years, a generation of shoppers readily choose them over cash, said Apacs, with another possible reason for the trend being that more businesses now accept them.
An overall increase in plastic card use was also found, with 63 per cent of all retail spending accounted for by a mix of credit and debit cards.
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