Source: UK Finance
Data published today by UK Finance reveals that contactless payments by debit card reached record levels in August, accounting for 62 per cent of all debit card transactions.
Just under half (45 per cent) of all credit card transactions were contactless, with the number of contactless credit card transactions in August increasing 14.6 per cent compared to the previous month.
As lockdown restrictions continued to ease and the government launched its ‘Eat Out to Help Out’ scheme, many consumers continued to take advantage of the £45 contactless spending limit, with the total number of all contactless card transactions in August increasing by 7 per cent compared to July, representing a total spend of £8.2 billion. This was a 3.1 per cent increase from July and a 19.3 per cent increase since last August.
Overall, there were 1.2 billion debit and credit card transactions in the UK in August, 1.3 per cent fewer than the previous month and 27.7 per cent fewer than in August last year. The total spend of £51.6 billion was 3.8 per cent less than July, and 14 per cent less than last August.
The value of transactions made by UK debit cardholders remained strong, with total spending on debit cards amounting to £58.4 billion - 1.2 per cent below the record total value seen last month, but 12.5 per cent higher than August 2019.
August also saw the UK’s annual growth rate of outstanding balances on credit cards continue to decline, falling 12.6 per cent over the twelve months to August as a result of repayments outstripping new borrowing in the year.
Eric Leenders, Managing Director of Personal Finance, UK Finance, said:
As lockdown restrictions continued to be eased in August, we saw
record numbers of customers choosing to make contactless payments using debit cards. Contactless card transactions using either debit or credit cards also increased compared to July, suggesting that consumers are taking advantage of the £45 contactless spending limit.
“Meanwhile, the amount of spending on UK debit cards fell slightly in August following a record high in July but remained strong at £58.4 billion.
“The percentage of credit card balances attracting interest and the annual growth rate of outstanding balances on credit cards continued to decline - the latter dropping by 12.6 per cent over the twelve months to August."