A movement by countries around the globe to embrace a cashless future is resulting in plastic payments (think credit and debit cards) to erode cash’s market share.
That’s according to new data from Retail Banking Research, which it rolled out Wednesday (Jan. 18). The firm found that 471 billion cashless payments were made around the world in 2015, up 52 percent since 2011. In the same period, ATM cash withdrawals increased but at a slower rate of 33 percent. Retail Banking Research said consumers are moving away from carrying cash and taking more advantage of alternative payment methods.
According to Retail Banking Research, payment cards accounted for 55 percent of cashless payments in 2015, up 50 percent from 2011. They now represent the largest share in all regions excluding Asia-Pacific. Credit transfers and direct debits, alternatives to cash, are also enjoying steady growth, Retail Banking Research found.
“The soaring use of contactless cards for low-value payments as well as immediate payment initiatives, which will facilitate person-to-person mobile payments, will further displace cash usage over the coming years,” said Chris Herbert of Retail Banking Research.
The research firm noted the increase in cashless transactions will continue, with cards being used for smaller payments supported by contactless enabled payment terminals. Growth in credit transfers is being helped by the implementation of systems that enable real-time transfers.
The research from Retail Banking Research meshes with other recent data points that show contactless payments are growing. The UK Cards Association reported that a quarter of all card transactions are done via a contactless terminal. The trade group said that in November alone, there were 325 million purchases using contactless debit and credit cards, representing 25 percent of all the card payments that month. The increase in the use of contactless cards led to a record £2.9 billion spent using the technology in November, the group found, marking a 184 percent increase from last year. In November 2015, contactless spending surpassed £1 billion in a month for the first time.