Card is king: Brits spent a record £600.3bn via debit and credit cards in 2014

The spending, which accounts for purchases Brits made at home and abroad, rose by 8.2 per cent year-on-year, according to the data from the UK Cards Association. 

Meanwhile, the number of purchases hit 12.96 billion at a growth rate of 12.1 per cent, which came as the convenience of card payments resulted in many more low value transactions via plastic.

Indeed, tap and go is a key component as the report noted that contactless cards becoming more mainstream has added to the abandonment of cash. Spending with the payment method trebled to £2.32 billion last year, accounting for 319 million transactions.

Transport for London overhauled its payment procedure in September 2014 and refused to accept cash, thus contactless cards, Oysters and prepaid tickets are the only accepted form of currency on public transport in the city.

The contactless sector is expected to gain further adoption in September 2015 when the limit will increase from £20 to £30, the study predicted, providing retailers with further opportunities.

Richard Koch, head of policy at The UK Cards Association, said: “Consumers are making more than twice as many card payments every day than they were ten years ago, a clear sign of how people are now choosing to use the cards in their wallet rather than cash.

“With more places now accepting cards, contactless payments and the rise in online shopping the large jump in card spending we saw last year looks set to continue.”

Elsewhere, findings found that debit cards are the most dominant payment cards found in consumer wallets, with 91 per cent of adults – 48.5m people – possessing one. This spiked to 94 per cent among people aged 16-24.

Interestingly, of every £100 spent via cards in the UK, a breakdown revealed:

  • £19 was on food and drink (of which 93 per cent was in supermarkets)
  • £11 was on financial services
  • £8 was on entertainment (of which 48 per cent was at restaurants)
  • £7.50 was on household goods (of which 40 per cent was in DIY stores)
  • £7.50 was on travel
  • £6.50 was on vehicle sales and services
  • £6 was on automotive fuel
  • £4.50 was on clothing
  • £3 was on hotels
  • The remaining £27 was spent at other retailers, mixed business and other services.

Payment processing firm Worldpay supported the trend of contactless payments being adopted, as it reported its transactions via tap and go have topped £2bn since January 2012 – up from the £1bn milestone reached in October 2014.

Dave Hobday, UK Managing Director of Worldpay, said: “Consumers demand convenience and contactless offers this beyond any other payment method. It makes paying for your morning coffee or a well-deserved glass of wine after work faster than ever before, while helping businesses cut queues at peak times.

“Once seen as a ‘nice to have’, contactless is now an essential payment method for increasing numbers of businesses in the retail, hospitality and entertainment sectors. The slow movers have seen all the benefits it brings their competitors and now fear missing out on vital sales to their savvier, technologically advanced rivals.”

Image: Shutterstock

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