The Payments Council added that in total non-cash methods, be it debit or credit card, contactless payments or cheques, will overtake cash payments and be used for more than half of all transactions by volume in 2015.
Mobile payments are expected to almost quadruple in volume, from 356 million payments a year to around 1.5 billion. The use of the cheque book will more than halve, from 823 million payments to 334 million.
The Payments Council, the body responsible for ensuring payment services work, said: “Technological change and payment service innovation will be key drivers of change.
“The digital economy wil continue to grow rapidly, driving change in the way payments are made and received.
“Much recent innovation has been around mobile payments, and mobile has the potential to make a significant impact on the payments landscape.”
The report confirmed that the level of cash payments by both consumers and business rose last year, in line with estimates earlier this June, as households squeezed by the credit crunch turn to cash as a way of managing their budgets.
Despite the collapse of the chequebook in recent years, the Payments Council said cheques were still used by 45 per cent of adults to make some payments. Most cheques are written by middle aged adults to help pay for school activities or after school clubs.