Debit cards preferred over cash in 2005 |
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Published
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Wed, 19 Apr 2006 19:35
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LONDON - Debit card spending increased in shops as well as on the Internet last year and outstripped the use of cash for the first time, according to the Association of Payment Clearing Services (Apacs).
The data shows that retail spending with debit cards jumped 9 percent to £89 billion in the UK last year, while cash spending fell 4 percent to £81 billion during the same time. Credit card spending remained unchanged at £61 billion. "At the end of 2004, we saw total UK spending on plastic overtake cash for the first time, signaling a real sea change in our payment habits," observed Sandra Quinn of the 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." She said that people had gotten used to using plastic instead of cash when they were out shopping. "Debit cards have been around in the UK for almost two decades so we now have an entire generation of shoppers who readily delve for their debit card instead of cash," Quinn said. The Apacs figures also showed that the use of cheques has continued to fall with only about £9 billion worth being handed out in shops last year.
Overall credit card spending was the highest with £295 billion being spent on plastic by consumers as compared to £272 billion in cash. The total use of debit cards for all purposes increased 14 per cent to £171 billion, while credit card use also increased by 15 percent to £124 billion. Apacs added that the death knell for cheques had been sounded as only 6 percent of consumers resorted to paying by this method. Automated payments such as direct debits and standing orders increased 5 percent to £251 billion in 2005, Apacs reported.
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Study finds more people prefer plastic money 