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Payment Trends

Thursday, 09 April 2015
The results of several surveys have recently been released, illustrating the trends that are ongoing within the payments industry. For the first time, the UK Cards Association has published the amount of online spending on cards along with numbers of online transactions. New figures published earlier this month show that during January, consumers spent twice as much on cards on average via the internet as they did in-store. The data shows that 30 per cent of the value of all spending on cards in January was via the internet, with £15.4bn of the £46.5bn total spent in this way. The number of online card transactions made up 12.3 per cent of total card purchases, equating to 118m of all 1,054m card payments. The new data also revealed people spend twice as much on average via the internet as they do in-store, with the average transaction value for each standing at £96.10 and £46.53 respectively in January. Meanwhile, according to figures from the Halifax, the use of cash and cheques continues to decline whilst digital payments are showing a steep rise; nearly 85% of all current account transactions made by its customers are now electronic. The popularity of the more traditional payment methods is waning in favour of digital, mobile and contactless technology and the emergence of 'pay a contact' services such as Paym. Debit card transactions now account for 56.7% of all Halifax current account transactions, up from 54.9% in 2013. Faster Payments usage, although low, continues to increase, up from 2.3% to 2.7%. However, cash withdrawals now only account for £18.33 of every £100 spent, a £1.82 decline since 2013. Although cheques account for one transaction in every 100, their relatively high value still accounts for £8.14 in every £100 spent this way. New research by Barclays indicates that payment by smartphones and tablets will rise more than five-fold over the next 10 years. Consumers are predicted to spend £53.6 billion a year using their smartphones and tablets by 2024, compared with the £9.7 billion spent today, according to the research. Mobile devices are expected to play a role in 42% of all retail sales by 2024, at every stage of a sale from browsing products to paying at the tills, including using an app to register complaints. However, a survey by the Bank also found that less than a third of retailers had a clear plan to invest in mobile functionality for payments. More than two thirds do not yet offer a mobile website or app, despite the massive rise in smartphone ownership over the last few years—to 61% of all adult Britons according to Ofcom figures.
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