With a transaction made at 10.38am on 29 December at Tesco’s West Cromwell Road branch by Helen Carroll, a Portsmouth teacher born in the same year and month that credit cards were first launched in the UK, Britain finally reached the point at which spending on plastic overtakes cash.
APACS, the UK payments association representing card issuers, estimates that spending on debit and credit cards will reach £269 billion in 2004, against £268 billion of cash payments. Accounting for predicted spending patterns over December, 10.38am on the 29th December is the switch-over point.
Jemma Smith of APACS said: “When the first plastic cards appeared in Britain in June 1966, only a handful of retailers accepted them and there were very few customers. But in less than 40 years, plastic has become our most popular way to pay, due to the added security and flexibility it offers.
“The key driver has been the introduction of debit cards, which now account for two-thirds of plastic card transactions and are used by millions of us every single day.”
Helen Carroll, a Portsmouth teacher who made the switch-over transaction, purchasing groceries at Tesco’s West Cromwell Road branch, was born in the month that cards were first introduced in the UK – and is a typical card user.
She said: “I pay for most things with my debit card, with occasional purchases on one of my two credit cards. To be honest, I’m now at the stage where I find it annoying if I have to pay with cash.”
Britain’s switch-over to becoming a plastic society happens as chip and PIN, the world’s leading anti-crime initiative, is being rolled out across the country. Seventy-five per cent of card-holders now have at least one chip and PIN card and 2005 will see increasing numbers of people authorising their transactions by PIN rather than signature.
Jemma Smith said: “Chip and PIN will make payment cards even quicker and easier to use and will help encourage even more people to switch from cash to cards.
“Some customers are already using chip and PIN, and some customers aren’t. If you are heading off to the sales this January no matter where you shop your signature or PIN will both be accepted - just as they are now.”
The UK’s first plastic card was a credit card introduced in June 1966. Today there are more than 130 million plastic cards in use in the UK, with 64.9 per cent of spending accounted for by debit cards and the remainder by credit cards.
This year, total plastic card use is expected to top £269 billion, against a predicted £268 billion of cash payments. In 2005, it is expected that personal plastic card usage alone will overtake cash payments.
