Credit and debit cards have existed for decades, but cash remained king until recently.
The rise of online shopping and mobile wallets mean people use electronic payment solutions more frequently. While cash probably won’t become obsolete, consumers will use it less and less in the coming years.
According to The Telegraph, the industry trade association Payments U.K. found debit card use will overtake cash in the U.K. by 2021. Currently, cash is the most popular purchasing method and accounts for 45 percent of payments in the nation. Although consumers used noncash payment methods more in 2014 – 52 percent compared to 48 percent cash – when evaluated individually, cash was more popular than credit, debit, check or other method.
However, cash is predicted to fall from the top spot in the next five years. In fact, industry experts predict that cash will constitute just 27 percent of payments by 2025. Credit and debit cards will make up more than 50 percent. In addition, people will use their debit cards approximately 25 times per month. They’ll use direct debit about six times and credit cards about five.
This trend isn’t limited to the U.K. Time noted that cash currently makes up 14 percent of all transactions in the U.S. Many researchers and economists suggest going cashless would be beneficial for society.
“For individuals and organizations conducting illicit activities, cash is undoubtedly the preferred payment mechanism,” Harvard president emeritus Peter Sands said in a paper, according to The Telegraph.
Electronic payments are easier to trace, making criminals much less likely to use them, experts predict. They do, however, increase the risk of payment fraud and identity theft.
Both of these concepts – the consumer preference for electronic payment methods and increased risk of payment fraud – indicate that businesses should be able to accept a variety of payment methods while ensuring that they use a payment processor that prioritizes secure transactions.
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