News & Views - Savantor

Growth of card payments in 2016

Thursday, 16 March 2017

Figures have just been released by the UK Cards Association for card spending in 2016. They show that consumers spent £647 billion using payment cards in 2016 and that there were 14.8 billion card transactions during the year.

Just over three quarters of retail spending (76.4%) was undertaken on payment cards, equating to £298 billion, compared to £290 billion in 2015.

Debit cards were used for the majority of card spending, accounting for £461 billion of sales.

Perhaps not surprisingly, a massive growth was seen in the use of contactless cards during 2016. £25 billion was spent during the year using contactless cards, compared to £7.75 billion in 2015.

The monthly card figures for January underline these trends, with spending on payment cards totalling £57.1 billion, up by £0.5 billion on December’s figures. Year-on-year this is an increase of £5 billion. The total number of monthly purchases reached a new record of 1.3 billion, with the share of total retail sales undertaken on debit and credit cards equating to 77.4% for the month. Spending online accounted for £15.3 billion and 176 million transactions and accounted for 27% of total card expenditure.

The ongoing rise in card usage is explained by the UK Cards Association as being partly driven by the continuing expansion in contactless and online payments together with a slight increase in consumer confidence in the economy.

The rise of contactless is expected to encourage consumers to use this form of payment instead of cash. According to Barclaycard, more than half of payments under £30 in London are tap and pay, and cash volumes are forecast to fall by 30% over the next ten years. Although there are various predictions of and discussions about when cash will die out – the latest being 2043 according to an online casino company – nevertheless it is difficult to envisage a time when the use of cash as a means of payment becomes obsolete across all areas of UK society.

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