The trade association for financial institutions, Payments UK, has published its annual analysis of the payments market. The report reveals that there were 38.7 billion payments made in the UK during 2016. Of all these, 4.1 billion were made by Direct Debit, worth a total of £1,262 billion.
Direct Debit is deemed by the report as a “familiar, well-established and widely-trusted method” among consumers paying recurring bills. It is expected that Direct Debit transactions will increase up to 4.4 billion in 2026. The prediction takes into consideration increasing figures such as population, household numbers, subscription services and businesses expanding the type of payment methods they offer.
This is only a limited growth over the next ten years, but Direct Debit is still the third most popular payment method in the UK after cash and debit card.
The report further reveals that debit card payments were the second most popular method of payment, at 11,562 million transactions in 2016. 2,521 million of these were contactless. These are expected to increase to 18,206 million by 2026, making it the fastest growing form of payment.
The factors behind this growth include the increasing popularity of over-the-phone card payments, contactless payments, card acceptance from most big and small businesses, and the growth of online shopping.
Payments UK expect debit cards to overtake cash in late 2018. The report highlights though that this does not mean the UK will become a “cashless society”. Cash is still expected to be the second most frequently used form of payment by 2026, with 8,719 million transactions. Cash payments in 2016 stood at 15,353 million.
Cheque use in 2016 totalled 471 million. The report points out that it remains valued by consumers who want to pay someone when they do not know the recipient’s bank account details.
The Cheque and Credit Clearing Company is introducing in October 2017 a new image clearing system that will decrease the clearing time from six to one working day.
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