Mobile payments on the rise but cash decline slows

Consumers are increasingly relying on their mobile phone to make payments rather than carrying bank cards, new data shows.

Two-thirds of adults in the UK were registered with at least one mobile payment service last year, according to an annual report by banking trade body UK Finance.

Use of a phone to pay has jumped in recent years. It is a decade since Apple Pay was launched in the UK.

While cash use continues to decline, the data suggests that the fall is slowing and that notes and coins will remain an important payment option for many people a decade from now.

Consumers are increasingly storing card details on phones or watches and making contactless payments backed up by facial or fingerprint verification, instead of pressing in a PIN.

Nine in 10 users of mobile wallets have their debit card loaded as their default payment method on their phone, with the remainder having registered their credit card.

That suggests phones are being used for everyday payments - with use particularly high for younger consumers, although older age groups are gaining ground.

More than 80% of 16 to 34-year-olds make mobile payments on a regular basis, compared with 22% of the over 65s.

"Our latest data show that the UK is now a predominantly digital economy when it comes to making and receiving payments," said Adrian Buckle, head of research at UK Finance.

The UK Payments Market report, released once a year, shows that debit cards - included those loaded onto phones - were the predominant way to pay last year.

They accounted for 54% of all payments in made in 2025. Some 39% of payments were contactless.

Cheques had been due to be phased out by 2018, until MPs forced a change of heart by the industry years ago.

Instead, they have withered to just 0.2% of payments made in the UK - with a total of 77 million written last year.

Cash is unlikely to go the same way, according to forecasts by UK Finance.

Notes and coins were used in 3.9 billion, or 8%, of all payments last year. This is expected to halve to 4% of all payments in the UK in 2035, or two billion transactions.

However, some people still had a strong preference for using cash.

"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," the report said.

Nearly 50 million people used a cash machines last year.

Nick Quin, from Link, which oversees the UK's ATM network, said: "Cash withdrawals are falling across every part of the country. More people find it convenient and prefer to pay using contactless cards and digital wallets on smartphones, but millions still rely on cash day in, day out.

"People on lower incomes rely more heavily or entirely on cash to budget, which is why our job is to protect access to cash for as long as people need it."