The march of plastic on the UK high street and
the web continued apace last year, driven by a huge advance in debit
card spending, which outstripped the use of cash for the first time.

In 2005 a generation of consumers who have grown up
with Switch, Maestro and Solo in their wallets and purses spent a total
of £89 billion on debit cards, a 9 per cent hike on 2004.

The use of notes and coins on the high street fell by 4 per cent to £81 billion, according to Apacs, the payment industry body

Sandra Quinn, director of communications at Apacs,
said: “At the end of 2004, we saw total UK spending on plastic overtake
cash for the first time, signalling a real sea change in our payment
habits.

“This change was mainly driven by debit card use. The
2005 figures show that this trend is continuing with debit card
spending in retail outlets crashing through the cash barrier for the
first time ever.”

Across all payments, the use of cards once again
eclipsed the use of cash in 2005, with consumers spending £295 billion
on plastic during the year, compared with £272 billion in cash.

Total use of debit cards, which celebrate their 20th
anniversary this year, soared by 14 per cent to £171 billion. Credit
card spending was just 1 per cent higher at £124 billion.

The use of automated payments, such as standing
orders and direct debits, rose by 5 per cent during the year to reach
£251 billion.

Apacs said it was too early to tell what the impact
of the chip-and-pin security system, made obligatory on debit card
payments in February, would be.

However, the days of at least one form of payment appear numbered.

Earlier this month, the death of the cheque edged
closer with one supermarket banning it as payment, when Asda announced
it would trial a cash and plastic-only policy at 21 stores within the
M25.

According to Apacs, cheques now account for only 6 per cent of retail spending.

However, despite schemes such as London Underground’s
Oyster card, which could be expanded this year to allow payments for
small items such as newspapers, Apacs said that the use of cash was
likely to remain popular for some time to come.