CONTINUE TO SITE »
or wait 15 seconds

article

5 ways payments will be different in 2024

A study by Payments UK makes bold predictions about changes in the payments mix from 2014 to 2024. (And says cash still won't be dead.)

5 ways payments will be different in 2024


by Andy Brown, Product Marketing Manager, Alaric Systems Ltd.

Predicting the future of cash and card payment volumes is arguably a fool's errand — but Payments U.K., Britain's new trade organization for the industry, is in a good place to have a go at guessing what's to come. So what does the forecast tell us about how consumers in the U.K. will be making payments in less than 10 years?

We'll be making more card payments

Card payment volumes are predicted to increase by 66 percent over the next decade. This is the chief reason why a record 44 billion payments are predicted to be made in 2024, which is up 3.4 billion on today's figures and equates to 120 million payments per day.

Debit and credit cards accounted for 51 percent of the volume of non-cash payments in 2014. But Payments U.K. says this figure will hit 60 percent by 2024.

Debit card purchases are expected to grow from 9.2 billion in 2014 to 16 billion in 2024 and this channel will become the single biggest consumer payment method — at 282 transactions per consumer per year — with cash in second place at 225. Undoubtedly, the rise of easy, low-value contactless card payments is a big factor.

Faster payments will be even more important

Real-time payments have been a big change in the last few years and the number of real-time payments made through the U.K.'s Faster Payments system is set to soar.

"The overall number of one-off payments processed as Faster Payments was 771 million in 2014 and is projected to reach 1.94 billion by 2024," says Payments U.K. "Direct debits are forecast to see steady growth over the next decade and reach 4.2 billion payments in 2024."

Clearing House Automated Payment System volumes will rise three percent each year over the next 10 years, to reach just over 50 million payments in 2024.

Cash will still be key

"Cash is dead," etc., etc.

Not if the Payments U.K. data is accurate. True, cash payment volume will fall 30 percent over the next decade, but it will still be the second most-used payment instrument after debit cards.

According to the forecast, cash will represent around one-third of the total volume of consumer payments, down from just over half today. The total value of cash spent by consumers will also fall but it's still going to be a big part of our daily spending.

ATMs will still be essential

Despite falling use of cash as a payment method, it's only going to be in second place after debit cards by 2024. This means that ATMs are set to be just as important as they are today — perhaps more so given the increased functionality being built into the machines.

"Cash machines will remain the main method by which consumers acquire cash over the next 10 years," says Payments U.K., noting that some 2.5 billion cash machine withdrawals will be made in 2024.

Interestingly, the value withdrawn is predicted to keep rising from today (189 billion pounds/$284.59 billion) through to 2019 (196 billion pounds/$295.13 billion), before falling back slightly over the years to 2024 (192 billion pounds/$289.10 billion).

Checks wil be down, but not quite out

Checks, by comparison, will be struggling. As a percentage of all noncash payments, checks will slide from 2.8 percent today to 0.8 percent in 2024. As a volume of all consumer payments, checks will fall from 1.1 percent in 2014 to 0.4 percent.

This post first appeared on banking.com.

graphic: istock


KEEP UP WITH ATM AND DIGITAL BANKING NEWS AND TRENDS

Sign up now for the ATM Marketplace newsletter and get the top stories delivered straight to your inbox.

Privacy Policy

Already a member? Sign in below.

  or register now

Forgot your password?


You may sign into this site using your login credentials
from any of these Networld Media Group sites:

b'S2-NEW'