Proportion of debit card transactions paid with contactless reaches record high

  • The proportion of debit card payments made using contactless reached its highest level in September. 
  • The overall number of contactless payments fell by 1.1 per cent compared to August, but the total value was 18.1 per cent higher than during September last year. 
  • Total debit and credit card spending in the UK fell slightly in September, with 4.2 per cent fewer transactions than in August, as tougher Covid-19 measures were introduced. 
  • The annual growth rate of outstanding balances on credit cards contracted again in September, dropping by 14 per cent as consumer repayments continued to outstrip new lending. 

Card spending data published today by UK Finance reveals that the proportion of contactless payments continued to increase in September to reach its highest recorded level, accounting for 64 per cent of all debit card transactions, compared to 62 per cent in August. Over four in ten (46 per cent) of all credit card transactions were contactless, a small increase on the previous month. 

The total number of contactless card transactions fell slightly by 1.1 per cent compared to August, and was down by 5.3 per cent compared to September 2019. The value of contactless spending, however, was 18.1 per cent higher than in September last year, as consumers continued to make use of the increased £45 contactless spending limit. The total value of contactless transactions was £8.2 billion in September, up from £7 billion in September last year. 

Overall, there were 1.1 billion debit and credit card transactions in the UK in September, a 4.2 per cent decline compared to August, and 31 per cent fewer than in September last year. The total spend of £48.9 billion was 5.1 per cent less than the previous month, and 18.3 per cent less than last September. This can likely be attributed in part to the introduction of stricter social distancing restrictions implemented to combat the spread of Covid-19.  

The number of transactions made by UK debit cardholders reached 1.6 billion in September, a 2.9 per cent increase on the previous month ? and a 6.1 per cent increase on September last year. The total spend of £58.5 billion was 0.2 per cent higher than August, but 12.8 per cent higher than last September. 

September also saw the UK's annual growth rate of outstanding balances on credit cards continue to decline, contracting by 14 per cent over the previous twelve months as a result of repayments outstripping new borrowing in the year.  

Eric Leenders, Managing Director of Personal Finance, UK Finance, said: 

September saw the proportion of contactless debit card payments hit a record high for the second month in a row, rising to 64 per cent of total transactions in August. The value of overall contactless spending was also up by over 18 per cent compared to the same period last year, as consumers made further use of the increased £45 contactless spending limit. 

?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 £58.5 million was much the same as in August, but 12.8 per cent 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 per cent over the year to September as repayments continued to outstrip new borrowing.

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Notes to editor

<p>1. For more information please call the UK Finance Press Office on 020 7416 6750 or e-mail <a href="mailto:press@ukfinance.org.uk.">press@ukfinance.org.uk. </a></p>
<p>2. UK Finance is the collective voice for the banking and finance industry. Representing more than 250 firms across the industry, we act to enhance competitiveness, support customers and facilitate innovation. </p>
<p>3. Full data tables are available <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.u…;. </p>
<p>4. The banking and finance industry has put in place a clear plan to help Britain through:</p>
<ul><li>2.7 million <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c… payment deferrals</a> </li>
<li><a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.u… million interest-free overdrafts</a> offered, 1.18 million payment deferrals on credit cards and over 828,000  payment deferrals on personal loans. </li>
<li>£65.5 billion of lending to over 1.5 million businesses through government Covid-19 lending schemes </li>
<li>Protecting customers from <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c… and fraud</a> </li>
<li>Higher limit for<a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2F74n5c…; contactless payments</a>  </li>
</ul><p>5. Please note that data on UK cardholders is different to data on card activity in the UK. Data on UK cardholders refers to transactions made either inside the UK or overseas on cards issued to UK residents and reported by card issuers. Data on card activity in the UK refers to transactions made in the UK only, both on UK-issued cards and cards issued overseas, this data is provided by acquirers.  </p>
<p>6. A summary of our annual UK Payment Markets 2020 Report containing detailed analysis of the use of all types of payments in the UK, can be found <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.u…;. </p>
<p>7. The quarterly Household Finance Review containing analysis and economic commentary on household finance in the UK, can be found <a href="https://eur01.safelinks.protection.outlook.com/?url=https%3A%2F%2Fwww.u…;. </p>
<p>8. The monthly credit card data has been re-stated back to January 2019 to increase our market coverage to 97 per cent providing a more representative picture of the credit card market. </p>

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