News & Views - Savantor
You are here:
/
/
/

Credit v Debit

Friday, 30 September 2011

It has been the case for some time in the UK that debit cards have become the card of choice for many consumers presumably down to a need to retain greater control over spending in these stringent times. Two recent reports from the UK Cards Association and researchandmarkets have confirmed this trend and looked at some of the issues behind it. In the UK, there are more credit cards in circulation than in other European countries, although their popularity has declined over the last few years. According to the UK Cards Association, 61% of UK consumers hold a credit card. This high level of card holding is partly due to the ease of obtaining cards in comparison with other European countries and the lack of regulation in terms of interest rates, allowing card issuers to price according to a risk assessment.

The UK Cards Association points out that the 2000s was a decade of two halves. Whilst the first half saw strong growth across all forms of plastic, from 2005 there was a sharp change in consumers’ appetite for credit cards, long before the recession. During the first half 22.8 million new credit cards were issued rising to a total of 70 million in 2005 but by the end of the decade the number of credit cards had fallen to 55.6 million and outstanding balances were £10 billion lower. Consumers’ spending on debit cards almost doubled from 2005 to 2010, fuelled by a migration from cash and increasing use of debit cards for smaller value transactions.

The mid-point of the decade saw an increasing preference for debit cards, tighter lending practices and consumers adopting a more cautious attitude to borrowing. From 2005 onwards, two million more adults decided not to use their card for borrowing, paying off their balance in full each month instead. This trend has continued – last year, 62% of cardholders paid in full each month, compared to 55% in 2005, with the over-45 age group accounting for much of the change.

Over the decade, an extra 35 million debit cards were issued, bringing the number in circulation to 84 million by 2010. Those cards were used three times more often than credit cards last year (6.5 billion compared to two billion) to spend a total of £299 billion – almost four times more than was spent on debit in 2000 (£77 billion). It seems like the marketing departments of credit issuers are going to face a challenging few months (or maybe years) to tempt consumers back to the fold.

Savantor Services

Savantor Services

Savantor services are tailored to Client needs based on our core service areas

Specialist Resourcing Payments Strategy Platform Transition Operational Efficiency
Savantor Services

Job Opportunities

Consulting and contracting roles in the payments, mobile and banking arena within the UK and across Europe

View more
Savantor Services

Savantor Views

Find out more from our Savantor brochures, MarketEye back copies and Industry opinion

Collateral Market Eye News & Views Sign Up to receive MarketEye

Client Quotes

Acquirer Specialist Support

"OP-Pohjola Group has used Savantors help in numerous different specialist projects differing from risk assessment to management tool creation to transaction analysis. We have been very satisfied by the quality of the service provided by Savantor's experts."

Kai Lindstrom, Head of Acquiring - OP-Services Ltd - Finland

Market Insights

"Savantor did a good job in helping us understand the dynamics of a key growth area for Trionis. Savantor's ability to listen and their degree of commitment have always impressed me. They have been of great help in providing us important market insights and I would not hesitate to work with them again in future."

Ernst Verbeek, Managing Director - Trionis - Belgium

Credit Card Migration and Operational Support

"The bank has undergone significant transformation of its card business on both the issuing and acquiring sides. One business partner we have looked to for support in the areas of strategy, major project leadership, management analysis and ongoing business support is Savantor. The Savantor team has contributed to our success as we have leveraged their deep industry knowledge and broad range of operational skills."

Sean Sheehan, Service Management Director - Bank of Ireland

Moneris Solutions

"Savantor did an outstanding job of the review and I received nothing but positive feedback on the interaction with our management team."

Jeff Guthri, COO - Moneris Solutions - Canada

Acquirer Strategy and Operating Model

"Savantor brought an effective blend of European acquirer market expertise and transaction processing solution design. Their experts quickly forged strong working relationships with our team. We enjoyed working with them to create our future acquirer strategy."

Mikko Hyttinen, SVP - Lending Services - OP-Pohjola Group - Finland

Complex Cards Business Transformation

"This was a major business transformation that required us to build an excellent team made up of internal bank specialists, supported by external card business, technical and operations expertise. Savantor provided specialists from the local market and with international experience to fill a variety of important roles. The Savantor resourcing team are professional, reliable and good people to work with."

Ricardo Gomez, Director - Operations & Technology - WiZink Bank - Spain

Platform Selection & RFP Management

"OP-Pohjola Group has used Savantor in both acquiring and issuing for platform/service provider research, RFI/RFP processes and subsequent contract negotiations. Savantor's approach and commitment have always been very professional and transparent. They have been of great help for the company in providing us important insights and background information beyond vendors sales speeches."

Kai Lindstrom, Head of Acquiring - OP-Services Ltd - Finland

Acquirer Risk Assessment

"The expertise provided by Savantor has greatly helped us evaluate our risk position and to take the right steps in managing our future risks. Strong, disciplined planning and an ongoing willingness to work closely with our staff played an enormous part in making this a very successful well-delivered project which will greatly help us in achieving our business goals."

Mark Healy, Chief Risk Officer - NEOVIA Financial - UK

Clients - Request Support

Send us a support request and one of our specialists will be in contact to assist you.

Consultants – Upload your CV

Register your CV with us and gain access to a range of job opportunities through our online job search portal.