Contactless Payments in UK Soar With 87% on Debit Cards

The UK Card Association recently released a report on card expenditure statistics in the UK as of September 2015. The report indicated a growth trend in purchases and card payments offline and online with a skew towards online shopping.

Payment card spending reached £52.7 billion in September, which is £0.5 billion more than in August. Online spending went up by 1.1% to £11.6 billion. It is worth mentioning that online spending represents 22.1% of total card spending.

The number of transactions increased, reaching 1.1 billion. Online purchases accounted for 134 million transactions, which are 11.7% of total card purchases.

In October, £929.8M was spent in the UK through contactless payments. This is an increase of 22.6% on the previous month and 213.1% over the year. About 87% of payments are made with debit cards.

As Richard Koch, Head of Policy at the UK Cards Association, commented, "Today, we think nothing of paying for a coffee and a sandwich with a contactless payment card or streaming films on a smartphone which is also enabled for mobile payments. This is so different to a decade ago when we carried more cash and shopped in high-street stores… Cards are accepted in more places than ever before and with innovations such as contactless cards and digital wallets, this trend is sure to continue."

Annual growth in debit card spending continued to exceed the credit card spending with growth rates of 8.7% and 6.9% respectively. However, growth in credit card spending has been recovering recently, boosted by payments on foreign-issued credit cards, in particular, at educational establishments, according to the report.

Speaking of sectors, the entertainment sub-sector rose by 15.2%, remaining the fastest-growing category. In contrast, spending on automotive fuels has been on a downward trajectory for over a year, decreasing by 7.9% since the beginning of the year.

The rise of online is also indicated on a more detailed level as there has been a 71% decline in spending at record shops and 49% at video stores because consumers have moved to online streaming services. Nearly a quarter of 1.3 billion online transactions in 2014, amounting to £119 billion, are now at entertainment sites.

Within the digital space, the number of online purchases grew by 23% compared to a year ago, while spending increased by 16%.

Consumer spending patterns vary when shopping offline and online. For example, 34% of total face-to-face card purchases in September were made at supermarkets, while online just 6% of all purchases were in supermarkets. In contrast, travel accounted for just 6% of total in-store spending, but 16% of online spending was on travel.

E-commerce is dominating the services sector where 32% of card spending was made in the Web while just 11% of retail spending was online. The highest e-commerce traffic was evident within financial services, where 45% of spending occurred via the Internet, followed by other services with 35%.