Yahoo Finance Contactless card spending hits record high
The proportion of debit card payments made using contactless reached a record high in September for a second month in a row, new spending data has revealed.
The overall number of contactless payments fell by 1.1% compared to August, but the total value — £8.2bn ($11bn) — was 18.1% higher than September last year as consumers made use of the increased £45 contactless spending limit.
Payments using the tap-and-go method accounted for 64% of all debit card transactions during the month, while more than four in ten (46%) of all credit card transactions were contactless, a small increase on the previous month, UK Finance said.
Figures from the trade association, which covers the UK banking and financial services sector, showed that total debit and credit card spending in the UK fell slightly in September, with 4.2% fewer transactions than in August amid stricter COVID-19 measures.
As the economy slowly opened back up over the summer, more retailers encouraged consumers to use card or contactless payments where possible to avoid the spread of coronavirus via physical money exchanges.
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The annual growth rate of outstanding balances on credit cards also contracted again in September, dropping by 14% as consumer repayments continued to outstrip new lending as Brits looked to avoid rising debt.
Eric Leenders, managing director of personal finance, UK Finance, said: “Debit card spending remained a preference as consumers continued to opt for more immediate settlement of payments as a means of managing their finances amid this year’s economic uncertainty.
“The total spend of £58.5m was much the same as in August, but 12.8% higher than in September last year.
“Given the popularity of debit card spending, the annual growth of outstanding credit card balances continued to contract, dropping 14% over the year to September as repayments continued to outstrip new borrowing.”
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