The evolution of paying

The evolution of paying

Since the first credit card was issued back in the 60s, the evolution of how we pay has accelerated at an incredible rate. We’ve moved away from physical cash exchanges at a considerable pace – and in May 2015 cashless payments overtook the use of notes and coins.

It seems that the transformation of payment methods has made it easier for consumers to spend money. We carried out a survey which revealed that nearly a quarter of all UK adults do not have any savings at all. This shows that the ease of making transactions today has directly impacted our ability to save money for the future.

This move to digital and contactless payments is only set to continue as these methods of payment mature in the eyes of consumers, technologies evolve and the demand for convenience grows. If retailers don’t keep up, they may be seen to be old fashioned and could even lose out on spontaneous online purchases.

Are we moving to a completely cashless society? Take a look at how our methods of payment have changed over the past 50 years:

1966: First credit card issued in the UK by Barclays

1968: Introduction of BACs in the UK means that money can be transferred electronically from one bank to another

1980: First telephone banking system is launched by Girobank 

1987: First debit card introduced in the UK by Barclays

1990: The company Confinity announces the launch of the first version of online payment service PayPal

1997: The first internet banking service introduced in the UK by Nationwide

2003: Oyster cards are first issued – which act as a ticket to travel on modes of transport across London  

2006: Chip and PIN was made mandatory nationwide – shoppers are no longer able to sign for their purchases.

2008: Contactless are cards introduced in the UK

2011: ‘Quick Tap’ payment method is developed and introduced by Barclays and Orange enabling customers to pay using their phones.

2012: Can now withdraw cash from ATM machines with mobile phones

2014: Contactless payments are accepted on London’s tube, DLR and overground

2015: Apple Pay is released in the UK. Your very own ‘digital wallet’, where you can make payments by   tapping your mobile phone on the card reader. PayPal.Me is also launched, which allows you to share a link via email, text, chat or post. The recipient can then click the link on any device to transfer money to you.

2016 and beyond…

What does the future of paying look like? It’s predicted that by 2019 there will be 3.9 billion people connected to the internet across the globe, so it’s clear that we’ll continue to move further away from using traditional money. With the development of new cutting edge gadgets – including wearable technology, tap-and-go parking machines, and cashless vending machines – the effort required to make payments will be minimal.

The future of paying: A cashless society?

With card payments significantly on the rise, it’s likely that the use of cash will become increasingly redundant. The Danish government is proposing that businesses should no longer be legally obliged to accept cash payments. The aim is that it’ll increase productivity for businesses, and therefore have a positive impact on the economy. Nearly a third of the population already use the Danske Bank app; allowing users to make fast payments on their phones.

According to the Swedish Institute, in Sweden 80% of all transactions are made on cards and many children even have debit cards. More recently, an app named Swish – which has been accredited for contributing to the reduction of cash circulating in the country.

Sweden’s Nordic neighbours Norway, Finland and Iceland are also leading the way to becoming cashless societies. According to The UK Card Association, 135.8m contactless transactions were made in January 2016 in the UK; suggesting that we may well follow and become even less dependent on cash payments.  

It’s not just new ways to pay that are reducing our reliance on cash. Payment providers such as iZettle have allowed small businesses and independent traders, who would usually have accepted only cash, to accept card payments. Easier payment in more places – it’s a clear trend and one that is only set to expand and evolve further. If technology can develop as it has over the last 50 years, the opportunities for payment methods over the next 50 are, quite possibly, endless.

With the pain of paying continuing to decrease as transactions become quicker, it has become easier to spend money daily, but this will only make it even harder to save money at the end of the month. If the UK do follow the trends being set by other countries, what impact will this have on our spending habits and ultimately our savings pot. 


i The research was run in consultation with Future Foundation and ICM. The findings are based on 5,000 online interviews among a nationally representative sample of UK adults aged 18 and above, carried out in February 2016 and analysed during February/ March 2016.

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