Mobile phones could replace credit and debit cards

LONDON (ShareCast) - Credit and debit card usage could be sent into decline by the rise of the mobile phone, the UK Payments Council has said.

The organisation said that while in recent times the popularity of the debit card has grown, it believes mobile phones could soon be making contactless payments in the same way certain cards do now.

Adrian Kamellard, Chief Executive of the Payments Council said: "We scarcely notice the steady changes in the way we pay, yet someone in their thirties today will see more change in their lifetime than in the entire history of money. Even recent innovations such as payment via a mobile phone, which ten years ago some felt to be science fiction, will soon be commonplace.

"The 2000s were the decade of the debit card. The 2010s are likely to be the decade of the mobile phone. Just as we can't imagine how we ever did without the internet, many people will soon wonder how we used to be so dependent on cash and cheque. Twenty years from now even cards may seem archaic.

"The quiet revolution in payments has enabled the creation of whole new industries such as e-shopping, it has changed our behaviour, and it has reduced transaction costs, and increased the speed and efficiency with which we can all pay each other. The next ten years will see even faster change."

The research also found that cheque usage has continued to fall, halving every five years, whilst reliance on cash has also continued to see a decline.

The rise of the debit card has been responsible for the decline of cash on the high street, with debit card spending up almost fourfold since 2001, while Direct Debits have completely changed the way regular payments are made.

Three out of five one-off payments are made in cash, but the Payments Council believes that because 91% of these come in at under £25, the increasingly popular contactless payment technology could revolutionise how way payments are made.

By 2021, consumer spending is forecast to be roughly 45% higher, but the use of cash is expected to have fallen 1.0%.

It's easy to imagine a future where we merely pat our pockets for our keys and phone. The wallet could become a historical curiosity," the Council added.