Increase in lower value transactions from debit cards
Cash is no longer king: debit cards are now the average Briton’s payment method of choice. Image by Alice-Photo (via Shutterstock).
Plastic is now the average Briton’s payment method of choice. Last year, transactions on debit and credit cards accounted for over half of our purchases. According to the British Retail Consortium’s survey, the rise of contactless cards have made debit cards a favourable option for low value purchases.
Compared with 2015 figures, there was a 4.5% rise in transactions from debit cards, accounting for 43% of all transactions in the UK. Cash payments accounted for 42% of transactions made in 2016. Contactless payments accounted for a third of all payments made with debit cards.
In 2016, cash purchases totalled £81.5 billion. For credit and debit card purchases, more than three times that figure, at £261.6 billion. From 2013 to 2016, the average transaction for card payments fell from £30.53 to £25.40. By cash, the figure rose from £9.21 in 2015 to £2.87 last year.
The smaller figure of £25.40 for card purchases reflects changing trends in the way we do our shopping. Firstly, internet shopping is a sound option for purchases of any size. Secondly, the uptake of contactless cards has meant more people paying for smaller items on plastic. The average customer flashes their contactless card or a smartphone (with a digital wallet app) to pay for their lattes.
We have come a long way since debit cards first hit the streets. They were launched in June 1987, back when Sheffield had two market halls (the Sheaf and Castle market halls off Haymarket). Back when Primark was C&A, facing the Hole in the Road, where Supertrams rumble towards Middlewood and Halfway today.
Like it or not, debit cards are here to stay. If any form of payment is likely to replace them, the future lies in smartphone based transactions.