Contactless debit card transactions reach record levels

The proportion of debit card payments made using contactless reached its highest ever level in September, according to industry organisation UK Finance.

The overall number of contactless payments fell by 1.1 per cent compared to August, but the total value was 18.1 per cent higher than during September last year, as consumers continued to make use of the increased £45 contactless spending limit.

The total value of contactless transactions was £8.2 billion in September, up from £7 billion in September last year.

Total debit and credit card spending in the UK fell slightly in September, with 4.2 per cent fewer transactions than in August, as tougher Covid-19 measures were introduced.

The annual growth rate of outstanding balances on credit cards contracted again in September, dropping by 14 per cent as consumer repayments continued to outstrip new lending.

Card spending data published by UK Finance reveals that the proportion of contactless payments continued to increase in September to reach its highest recorded level, accounting for 64 per cent of all debit card transactions, compared to 62 per cent in August.

Over four in ten (46 per cent) of all credit card transactions were contactless, a small increase on the previous month.

Overall, there were 1.1 billion debit and credit card transactions in the UK in September, a 4.2 per cent decline compared to August, and 31 per cent fewer than in September last year.

The total spend of £48.9 billion was 5.1 per cent less than the previous month, and 18.3 per cent less than last September. “This can likely be attributed in part to the introduction of stricter social distancing restrictions implemented to combat the spread of COVID-19,” said UK Finance.

September also saw the UK’s annual growth rate of outstanding balances on credit cards continue to decline, contracting by 14 per cent over the previous twelve months as a result of repayments outstripping new borrowing in the year.

Eric Leenders, managing director of personal finance at UK Finance, said: “Debit card spending remained a preference as consumers continued to opt for more immediate settlement of payments as a means of managing their finances amid this year’s economic uncertainty.”

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