Debit card spend on the rise but cash is still king

This week Visa suggested that debit card spending will overtake cash as a method of payment this year as a result of trends such as the increase in internet shopping. However, as Andrew Bailey of the Bank of England suggested, cash is far from 'dead' and is used for 60% of transactions. Clearly, cash is still one of the most trusted forms of payment.

While debit card transactions may be rising, cash is not going away. Both the ATM and debit cards are valid parts of the banks payment systems strategy, having their own unique advantages for the customer. Debit cards are necessary for new payment needs such as online shopping, however investment in the ATM channel continues to be essential given that ATM withdrawals account for around 70% of cash acquisitions compared with 25% in the 1990s. ATM numbers are now around 2 million worldwide and predicted to grow to 2.5 million by the end of 2013.

In addition, while innovation of payments is often seen to be taking centre stage with the arrival of new products such as contactless, banks should also consider implementing innovative new functionality at the ATM to make the most of the terminals’ usability. For example, mobile phone top-up and deposit processing are just two of the options which banks are rolling out at present. Customers are increasingly more demanding and it is crucial that banks respond by ensuring that they are provided with high levels of convenience across all payment channels.

Ian Kerr