Are people more likely to pay by cash or card?

Cash or card? We make this decision the majority of times we want to make a purchase. But which method are people more likely to choose? A report last year revealed that in 2017, debit cards overtook cash as the preferred form of payment for the first time, a year earlier than expected, with 13.bn debit card transactions made.

But why are we turning away from cash? Let’s explore the main reasons.

Security and convenience

Cards are safer to carry than cash. If your card gets lost or stolen, you can quickly cancel it. That isn’t the case with money.

Plastic is also more convenient. You can go out with just your card and make a purchase at most shops, bars or restaurants. If you rely on cash, you need to make sure you have enough money on you in advance. It’s little wonder most people now prefer to use their cards. In fact, ATM data from 2016, showed that people withdrew more than £6bn less than they did in 2015.

Contactless payments have made shopping even easier and the figures show that more and more people use this to complete their low value transactions. There were 4.3 billion contactless payments made in 2017.

Online shopping

If you shop online, you’re not alone. A recent poll of Brits revealed that 78% of us made internet purchases in 2018. And as we all know, to make internet purchases, you need a card.

Spending analysis

If you’re trying to keep an eye on your budget, it’s much easier to achieve if you use cards. Every transaction you make will be on your bank or credit card statement, so you can easily see how much you’re spending and on what. By analysing your spending habits, you can also identify where savings can be made. Review your card transactions regularly and you could reduce your outgoings.

The end of cash?

But what does this mean for cash? The independent Access to Cash Review has warned that if cash declines at its current pace, it could be defunct by 2026. This could badly affect people on lower incomes, or in rural areas, who may rely on local shops and services that don’t accept card payments.

But considering that 97% of people still carry cash on them and would like to continue having the option of paying for things in cash, it’s unlikely that we’ll ever be a truly cashless society.