Use of cheques down 10%, figures show

Britons wrote an average of 290,000 fewer cheques each day during the three months to the end of June, compared with the same period of 2009, according to the Payments Council.

People instead turned to faster payment methods, such as using debit cards and the Faster Payments system to transfer money between accounts.

Debit card usage rose by 12.4% during the period, while the level of transactions carried out on the Faster Payments system soared by 67% as more banks made the service available to their customers.

The increased use of debit cards also reduced the amount of cash people used during the period.

The amount of cash withdrawn from ATMs, generally seen as a proxy for the amount of cash used for transactions, was 3.2% or £1.6 billion lower than during the same quarter of the previous year.

Credit card spending was also weak, rising by 3.9%, barely ahead of inflation, due to the ongoing shortage of credit, as well as increased debit card usage.

Repayments continued to match new spending on credit cards, as consumers shied away from increasing their borrowings.

Sandra Quinn, director of communications at the Payments Council, said: "The payments revolution continues apace in the UK.

"Cheque usage is shrinking dramatically, while credit cards hold less appeal for consumers and businesses.

"We use cash less where there is an easy alternative, but we're years away from cash falling out of fashion."

But she added that the overall payments figures showed a "distinct lack of energy" in the UK economy, with the total value of all payments during the second quarter 0.6% lower than during the previous year.

People's spending patterns reflected events that happened during the first half of the year, with card spending on airline tickets dropping by 7%, as the industry suffered disruption caused by the harsh winter, British Airways' strikes and the volcanic ash cloud.

The dip in spending on airline tickets was particularly pronounced between April and June, when it dropped by 13%.

Airport shops suffered even sharper declines in sales, with revenues sliding by 18% during the first half, reflecting a fall in the number of travellers.

But spending on ferries, buses and trains rose by 16%, 14% and 8% respectively during the first six months of 2010, as travellers looked for alternative routes.

The figures also showed there were winners and losers from the football World Cup.

Spending in supermarkets rose by 7% in June, while spending in pubs was up by a fifth, but people spent 31% less in DVD stores as they focused on watching the tournament.