Half of UK adults used mobile contactless payments regularly last year, while cash accounted for less than 10% of payments for the first time, according to a banking and finance industry body.
Cash made up 9% of payments in 2024, down from 23% in 2019 and 48% in 2014, UK Finance said.
Its report said that more people are using their phones, watches or other mobile devices to manage money and make purchases, with 57% of adults being registered to use mobile wallets last year, up from 42% in 2023.
The report said: “In terms of the total population, 50% were using mobile contactless payments at least once a month in 2024. It is the first time that regular mobile payment users reached half of the adult population in the UK.”
Younger people are leading the way in this adoption, but there is already significant use among older age groups, the UK Payment Markets 2025 report said.
It said: “Similar to most new technological innovations, UK Finance market research found that younger people are more likely than older people to use mobile payment services such as Apple Pay or Google Pay.
“We expect that, over the next decade, older age groups will start to catch up with younger cohorts in terms of adoption of mobile payments, a pattern that is regularly seen following the introduction of new payment services and technologies.
“This pattern was observed with contactless card payments and we are likely to see it with mobile payments too.”
The total number of payments made in the UK last year was 48.6 billion, up by 1.5% compared with 2023.
Consumers were responsible for 84% of payments last year, while businesses, government and not-for-profit organisations accounted for 16% – including salary, pension and benefit payments to people and payments between organisations.
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UK Finance said that, in a similar way to how contactless payments have replaced some low-value payments in physical cash, contactless mobile payments appear to be replacing contactless payments initiated using aphysical card.
Nearly a third (30%) of UK adults were living “largely cashless lives” in 2024, the report said.
Around 16.9 million adults used cash once a month or less last year, while 1.2 million mainly used cash, UK Finance said.
Nearly a fifth (19%) of people aged 65-plus rarely used cash (using it once a month or less frequently), compared with 40% of 16 to 24-year-olds.
The report said that while age is “the most accurate predictor” of cash use, data suggests people on high incomes are more likely to rarely use cash than people on lower incomes.
It added: “Among those who had a yearly income of £65,000 or more, 46% rarely used cash in 2024, whereas among those who earn £20,000 or less a year, the share of rare cash users was 22%.
“There is also a gender gap in cash use as women (33%) are more likely to be rare cash users than men (26%).”
Back in 2023, 1.5 million people mainly used cash for their everyday spending, as households finely balanced their budgets during the cost-of-living squeeze.
The report said: “Cash, which until 2023 was the second most used payment method in the UK, has now fallen below the level of direct debit, faster payments, and credit cards.”
Physical and mobile cards were the most used way to pay in the UK last year, making up 64% of transactions.
Around 62% of debit card payments and 55% of credit and charge card payments were contactless.
Buy now pay later (BNPL) services, which allow shoppers to split payments, saw notable growth last year, with one in four (25%) UK adults using them, up from 14% the year before, the report said.
Fashion led the way, making up 46% of BNPL transactions, with an average spend of £114.
Mobile banking, via a banking app for example, became the most common way to access accounts in 2024, used by 75% of UK adults. It overtook desktop banking for the first time, UK Finance said.
Looking ahead to 2034, cards are expected to remain the most popular way to pay, accounting for around 67% payments, UK Finance said.
Mobile wallet use is expected to grow, with more people, including older age groups, registering and using them more often for everyday payments.
New services such as “pay by bank”, which allow people to pay money to a firm directly from their current accounts, instead of using other methods such as cards, could also become more common, UK Finance said.
Meanwhile, “traditional” payment methods such as cash and cheques are expected to decline further, with cash projected to fall to 4% of payments in 2034 from 9% last year and cheques to just 0.1% (from 0.2%).
The rate of decline in cash use has slowed as use becomes concentrated among people who have a strong preference for cash and in situations where cash has advantages over other payment methods, the report said.
Over the next 10 years, the decline in cash use is expected to be less rapid than it has been over the past decade.
The report said: “Rather than the UK becoming a cash-free society over the next decade, the UK will transition to an economy where cash is less important than it once was but remains widely valued, and still preferred by some.”
Adrian Buckle, head of research at UK Finance, said: “2024 was a year of firsts, all pointing to the growing shift towards digital payments – more than half of UK adults used mobile wallets, mobile banking overtook desktop as the main way people access their accounts, and cash fell below 10% of all payments.
“These changes weren’t just driven by younger consumers. We saw growth in mobile wallets and buy now pay later across older age groups, too, highlighting how digital payments are becoming more mainstream across the board.
“Action from regulators to improve competition, along with the rollout of the National Payments Vision, aimed at fostering a new era of innovation in payments, is helping to create the conditions for further change in theyears ahead.”
Adrian Roberts, deputy chief executive at cash access and ATM network Link, said: “Today’s report complements recent research from Link that found that digital payments are the default choice across society, not just the young.
“While the number of people relying on cash continues to fall, we know that those who do are often on lower incomes or the more vulnerable. We must not sleepwalk into a digital-only society before everyone is ready.
“There is also a question of resilience for a digital-only payments system. What happens in the case of widespread power outage? Digital payment systems need to be stronger and more resilient, and the work led by the Bank of England on the National Payments Vision is an excellent step in that direction.”
Gareth Oakley, chief executive officer of Cash Access UK, said: “The success of the banking hubs we’ve established so far clearly demonstrates the ongoing need for access to cash and in-person banking services – there are on average 150 customer transactions every day in our banking hubs.
“And by the end of this year, we expect to support one million customer transactions every month through the hubs and our wider cash services.”
Here are the proportions of each age group registered to use mobile payments in 2024, according to UK Finance:
16 to 24, 88%
25 to 34, 78%
35 to 44, 65%
45 to 54, 58%
55 to 64, 47%
65-plus, 25%
