According to a financial sector organization, about one in three adults uses contactless mobile payments every month.
According to UK Finance, 34% of adults will use contactless mobile payments at least once a month by 2023.
There was a marked increase in the number of people who registered for contactless mobile payments such as Apple Pay or Google Pay last year, UK Finance said. They represented 42% of the adult population, up from 30% in 2022.
The report says: "Market research in the UK on finance has found that younger people are more likely than older people to use Apple Pay or Google Pay.
"We expect older age groups to overtake younger generations in mobile payment adoption over the next decade. This is a pattern we see regularly following the introduction of new payment and IT services."
In 2023, around 18.3 billion contactless payments will be made in the UK, an increase of 7% compared to 17.0 billion in 2022.
In total, contactless payments accounted for almost two-fifths (38%) of all payments in the UK.
This figure includes both the use of physical cards and cards loaded onto mobile phones or other devices such as watches, which then allow contactless payments to be made.
According to UK Finance, there is room for further growth in the use of contactless mobile payments.
Mobile contactless payments have security features such as biometric authorisation of individual payments and are not restricted by the £100 limit for individual contactless card payments.
UK Finance's payments markets report, produced in partnership with Accenture, also found that the number of cash payments in the UK fell by 7% to 6.0 billion in 2023, compared to around 6.4 billion in 2022.
The number of cash payments rose for the first time in a decade in 2022, but has since fallen back to 2021 levels, the report said.
In 2023, one in eight (12%) of all payments in the UK will be made in cash, up from 14% in 2022.
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Nearly two in five (39%) adults in the UK lived "mostly cashless" last year, the report found.
The number of people who mainly used cash in 2023 increased from 1.7% in 2022 to 2.6% of the population.
The report found that small increases in cash payments, against a background of longer-term decline, "tend to occur during periods of economic uncertainty or recession, and reflect the fact that some consumers find cash a useful payment method when trying to manage a tight budget".
Following the 2008/2009 financial crisis and into 2022, we saw an increase in cash payments as rising costs of living led some consumers to try to curb their spending, the report said.
The report added: "As consumer confidence begins to recover, we typically see cash payment volumes return to their long-term downward trend. This looks set to be what we saw in 2023."
While the average consumer experience appears to be a shift away from cash, the report noted: "It is important to note that this is not the experience of all consumers, and for some, using cash remains an important element of how they manage their finances."
The report finds that remote banking (online, mobile or telephone) will remain popular in 2023, with 87% of adults using at least one form of remote banking last year.
Mobile banking usage increased last year, while online banking via a computer declined, reflecting the fact that some people now do all their banking via their mobile device, according to UK Finance.
If current trends continue, mobile banking is likely to become the most widely used remote banking service in the coming years.
Spending data from recent years also shows that consumers are making more lower-value transactions, without spending more overall.
Anecdotal evidence suggests this trend is being driven by an increase in in-store visits, the move to hybrid working, the use of multiple bank accounts and increased use of 'buy now, pay later' (BNPL) services, the report said.
In 2023, the total number of payments in the UK was 48.1 billion, compared to 45.7 billion in 2022.
The report expects the number of debit card payments to continue to grow over the next decade, driven by the continued rise of contactless payments, the continued growth of online shopping and increasing acceptance of debit cards by businesses of all sizes.
Cash payments are expected to continue to decline, but the decline is likely to slow as their use becomes concentrated among people who have a strong preference for cash.
Adrian Buckle, head of research at UK Finance, said: "Consumers have a huge amount of choice when it comes to the way they pay, but we are certainly seeing the continued popularity of debit cards and contactless payments.
"This is a result of both consumer demand and new technologies that are helping to increase adoption rates, particularly among small and mobile businesses.
"Mobile contactless payments are growing rapidly, with a third of adults now using them at least once a month, and their use could grow further.
"This doesn't mean we're heading towards a cashless society. Cash is still the second most used payment method in the UK, although we're using it less overall and more people are living largely cashless."
Sulabh Agarwal, Global Payments Lead at Accenture, said: "Just as credit and debit cards once offered consumers a more seamless option than cash or checks, contactless and mobile payment methods such as digital wallets are rapidly gaining market share.
"To maintain and grow their traditional payments revenue streams, UK banks must learn from the successful customer offerings and business models in Latin America and Southeast Asia, where these methods are more widely adopted."
John Howells, CEO of ATM and cash access network Link, said: "People continue to choose new ways to pay and cash is being used less and less.
"But it remains vital for millions of people - even as data predicts cash will account for just 6% of payments in a decade - it is critical when other systems fail, as we saw in last week's outage.
"Despite people moving away from cash, £1.6 billion a week is still spent across our network."
Rich Wagner, CEO of Zempler Bank, said: "It is clear that the adoption and preference for digital payments is happening faster than we have seen in the past, when these changes typically took generations to become established."