The amount of debit cards purchased by customers rose by 8 per cent in 2016 alone and is set to do so again in 2022 by 22 per cent. 71 per cent of payments are made using this type of card, which represents a marginal rise from 70 per cent in 2015. Developing markets in Asia-Pacific, the Middle East, Africa and Latin America will help contribute towards these growing numbers as a debit card is the first type of card a person is provided with when they open a bank account. In the UK, children are provided with cards from the age of 11.
The use of credit cards declined by 2 percentage points to 20 per cent in 2016 due to the EU’s inter-charge fee caps limiting the profitability of credit card companies. Tighter regulations in the UK were caused by an alarming rise of credit card bills this year.
This pattern represents a shift towards a cashless society in Europe. According to the ING International Survey Mobile Banking 2017, one in five in the continent very rarely carry coins or notes. 54 per cent of people said that they are discovering they are using less cash than they did 12 months ago, and that total is set to increase by 78 per cent at the end of this year. Since the introduction of cashless alternatives in the 1980s, surviving without paper money is becoming a reality. 34 per cent of consumers surveyed found that they would be happy to go cashless completely.
Other types of digital currencies being circulated include Bitcoin. Even though billionaire investor Howard Marks dismissed this as a “fad”, there are now 16 million Bitcoins in circulation, each worth £2,874. Countries like Switzerland and Finland have started to accept this currency and many more may follow in the immediate future.
Only 6 per cent of European consumers said removing massive denomination notes would affect their finances as the EU prepares to end the 500-euro bill completely, showing European authorities are discouraging cash payments altogether.
With the expansion of these types of payments, it would be fair to predict that by the end of the 2020s, cash payments may come to an end. These days, people have a range of choices when it comes to what payment method they intend to deploy. The number of consumers carrying cash is gradually decreasing. Contactless payments have made transactions faster. This is a drift that is set to continue and many authorities should regulate it sensibly, but not prohibit it altogether, as other countries have done with digital currencies like Bitcoin.