News & Views - Savantor

100 million debit cards now in circulation

Saturday, 16 July 2016

According to figures issued by the UK Cards Association, there are now more than 100 million debit cards in circulation in the UK for the first time.

The 100 million milestone was reached in April, as a result of a 2.7 % growth in debit cards over the previous 12 months, from 97.6 million in April 2015 to 100.3 million in April 2016. Debit card spending was up 6.8 % on the previous 12 months to £37.8 billion in April 2016.

The increase in debit cards and their usage reflects the changing patterns in consumer payment behaviour and choices. Along with the closure of the cheque guarantee scheme in 2011 and a decrease in popularity of ATM only cards, there has been a surge of interest in debit cards, which are typically issued as standard procedure as part of the new current account opening process.

Over 60% of debit cards now feature contactless technology and this figure is set to rise as more issuers embrace the technology in response to higher consumer popularity with this method of payment, fuelled to a great extent by the adoption of contactless as a means of transport payment.

According to a new report issued by Payments UK, it is predicted that debit cards will take over from cash to become the UK’s most frequently used payment method. Although cash was still the most popular payment method in 2015 and accounted for just under half of all payments, it is predicted that by 2021 there will be 14.5 billion debit card payments, overtaking the forecast 13.0 billion cash payments for the first time.

Payments UK also forecasts that by 2025, credit, debit and charge cards will account for more than half of all payments made (50.2%). Again, this is expected to be driven to a great extent by the increasing popularity of contactless; contactless cards accounted for 16% of total card purchases in April, an increase of 6% from 2015.

It will be interesting to see how these forecasts fare in time. However, what we can be sure of is that debit cards and contactless together make a formidable combination as a consumer choice of payment mechanism.

 

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