15th October 2015
An all-time record 44bn payments will be made in 2024, equating to 120m transactions per day, according to new research from Payments UK.
The trade association for the payments industry said the increase will be driven by rises in card, internet and mobile banking payments.
The overall number of one-off payments processed as Faster Payments was 771m in 2014 and is projected to reach 1.94bn by 2024.
Direct Debits are forecast to see steady growth over the next decade and reach 4.2bn payments in 2024. It is also forecast that CHAPS volumes will grow at an average annual rate of 3% over the next 10 years, to reach just over 50m payments in 2024.
Focusing on the payment methods used by consumers, forecasts suggest the most significant increase in the next decade is expected to come from debit cards. This will largely be at the expense of cash as more consumers use debit cards to make contactless payments.
It is expected that in 2016 the total volume of all non-cash payments made by consumers will exceed the volume of consumer cash payments for the first time. Looking at consumer and business payments combined, non-cash payments overtook cash payments in July last year.
Debit card volume growth will also come from increasing contactless card and e-commerce usage. In 2014 debit card payments represented 26% of consumer payment volumes. By 2024 this is projected to rise to 42% of consumer payment volumes – equivalent to an average of 282 debit card payments per person.
Number of annual consumer payments made per adult:
|Automated credit (Faster Payments, Bacs Direct Credits and Standing Orders)||20||37|
|Other, including store cards, prepaid cards and PayPal||9||12|
Cards – both debit and credit – accounted for 51% of the volume of non-cash payments in 2014 but by 2024 they are projected to account for 60% of non-cash transactions.
Within this, the volume of debit card purchases is expected to grow from 9.2bn in 2014 to 16bn in 2024. In terms of percentage growth in payment volumes, the strongest growth over the next 10 years will be experienced by one-off automated credits processed through the Faster Payments Service, which is forecast to nearly double by 2024.
Cash machines will remain the main method by which consumers acquire cash over the next 10 years.
Some 2.5bn cash machine withdrawals are forecast in 2024, with the value withdrawn predicted to rise from £189bn in 2014, to a peak of £196bn in 2019, before falling slightly to £192bn in 2024.
Cheque payments are expected to decline from 2.8% of all non-cash transactions in 2014 to 0.8% in 2024, with 135m consumer cheque payments and 118m business cheque payments forecast.
In 2014 cheques only accounted for 1.1% of the volume of consumer payments and are forecast to decline to 0.4% by 2024. Cash on the other hand accounts for a much larger share of consumer payment volumes at 53% in 2014; however this will also decline to 33% by 2024.
Over the next 10 years, the research shows that the number of cash payments is set to decline. There are forecast to be 12.6bn consumer cash payments in 2024. This represents a decline of 30% compared to the 18.1bn consumer cash payments in 2014. This would see cash represent around 33% of the total volume of consumer payments, down from 53% of consumer payments in 2014. The total value of cash spent by consumers is forecast to fall in nominal terms, from £253bn in 2014 to £238bn in 2024.