Card Payments up 10% Thanks to Contactless TechJuly 7, 2015
Recent reports on the number of card transactions occurring in the UK have shown that 2014 saw a 10% increase in card purchases from the previous year. We’ve also seen that cashless transactions have taken over from physical coins and note payments, with the Payments Council reporting that cash transactions fell to 48% in 2014, leaving 52% of payments to be made up of electronic transactions.
The UK Cards Association has explained how a steep rise in low-value transactions through contactless payments (anything from £20 and under) can be partly attributed for this overall rise in card transactions. We will, no doubt, continue to see the number of low-value transactions rise as the transaction limit increases to £30 in September this year.
Head of Policy at the UK Cards Association, Richard Koch commented that: “Consumers are making more than twice as many card payments every day than they were 10 years ago.” This is perhaps not surprising given the continual growth in the popularity of online shopping, which currently accounts for approximately £21 in every £100 that is spent via debit or credit cards in the UK.
September 2014 saw the introduction of contactless card technology on the London transport system. The system allows people to make payments with their contactless cards without the need to enter their 4 digit pin. This no doubt also plays a large part in the rise that has been seen in the number of card payments being made. Indeed, the UK Cards Association has reported that London transport is now responsible for 11% of all contactless transactions made in the UK.
There is no doubt that contactless card spending will continue to rise, given the ever-increasing demand from consumers for payments to be made faster and easier. As such, cities throughout the UK, such as Manchester, now plan to introduce contactless payments on their own transport networks; a move which will surely continue to bump up the number of card transactions being made.
A few years ago, it would still be quite common to come across a retailer who only accepted cash, however, this is now a lot rarer. Instead, it would now be rare to come across a retailer who hadn’t yet implemented contactless payment technology. As contactless cards become ever more popular, this retailer trend will only continue to grow.
Consumers don’t want, or need, to wait around to make payments anymore. They want transactions to be immediate and with the introduction of smartphone fingerprint technology, this is now possible. No longer do consumers have to wait to enter their pin number to fulfil a transaction; a simple swipe is now enough.
With contactless transactions being so incredibly speedy and simple, it is no wonder that we are seeing an increase in the frequency of card payments. Contactless tech will no doubt continue to improve as consumers start to demand more and more from their cards and smartphones, so it is more than likely that this trend is long set to continue.