UK Card Spending Surpasses £600bn
British consumer spending is continuing to shift from cash to cards, with total spending on UK-issued cards rising 8.2% in 2014 to a record £600.3bn (US$923bn), reports the UK Cards Association.
More than 35m card payments were made daily last year and the number of purchases increased 12.1 % to 12.96bn, as consumers made more lower-value card transactions of £20 and less. This meant that the average purchase value on a debit card actually dipped to £43.45 last year – down £1.04 from 2013.
Three in every four pounds spent at UK retailers was via a debit or credit card, up 10 percentage points since 2009. Shoppers used debit cards more than credit cards; the former accounting for 77% of all card purchases.
Online shopping has become a major part of consumer spending, representing £21 in every £100 spent on cards at UK retailers – the first time the figure has been collected.
Anthony Duffy, director of retail banking at Fujitsu, commented that the data was no surprise. “Banks and payment organisations have worked hard over recent years to; promote plastic card usage, quicken the experience of making payments and introduce exciting innovations, such as contactless transactions.
“Consumers also appreciate the wealth of plastic card options that are available to them – for example, debit cards seem to appeal to younger people, while the older like credit and charge cards. Of particular interest is that demand for automated teller machine (ATM)-only cards grew 5% in 2013, demonstrating that plastic can still help those who value cash – particularly because it is accepted universally and cannot be overspent.
“Predictions regarding future card usage are also worth noting. The UK Cards Association expects card transactions to increase by a further 70% over the next 10 years, driven by even greater debit card usage and a growth in contactless transactions.
“However, it will be interesting to see the degree to which transactions migrate from plastic to the mobile phone, and how this impacts transaction behaviours, particularly given that use of electronic wallets is also expected to increase over the next decade.”