UK enjoys Summer of Love for contactless cards
For years, much of the hype in payments has been around mobile payments and blockchain technology. But the innovation that has done the most to change British shopping habits has been contactless cards, which launched in 2007 but have really come of age in recent years.
Total UK card spending reached £57.1 billion in June, up by 0.3% month-on-month and up 7% year-on-year, according to data published by UK Finance, an industry body.
There were just under 1.4 billion card payments in the UK in June, a monthly record. And with the number of card transactions up 12% in 12 months, UK cards have enjoyed their highest annual rate of growth since June 2008.
The rise was partly driven by a robust rise in online sales, with online card payments rising 20%, but the more significant factor was the increase in the use of contactless card payments, which soared by 143%.
Contactless payments accounted for 34% of all card transactions, while online payments – which would include payments made through channels like PayPal if the account is linked to a card rather than being pre-funded – accounted for 13%.
UK-issued debit card use abroad was actually down 3.6% between May and June, says UK Finance. Instead, growth in both credit and debit cards has come from domestic spending, especially in the retail market.
Cards accounted for 77% of all retail sales in June, with over a billion debit card payments and over 300 million credit card payments.