UK card spending reflects tough times

Debit cards entrenched their position as the UKs favorite payment card in the second quarter of 2008, recording a total transaction value of £60.91 billion ($115 billion), almost double the £31.68 billion spent using credit cards, data from payments industry body APACS reveals.

Debit cards entrenched their position as the
UK’s favorite payment card in the second quarter of 2008, recording
a total transaction value of £60.91 billion ($115 billion), almost
double the £31.68 billion spent using credit cards, data from
payments industry body APACS reveals.

However,
year-on-year growth in the value of debit card transactions at 9.5
percent was the lowest since the first quarter of 2002 and well
below the CAGR of 16.9 percent recorded between the first quarter
of 2000 and the first quarter of 2008.

Reflecting tough economic conditions, credit
card spending continued to recover in the second quarter, rising
3.5 percent compared with first quarter 2007 to £31.68 billion.
This equalled spending in the first quarter of 2008 and is a level
exceeded only by the £31.86 billion recorded in the fourth quarter
of 2007.

Also notable in the second quarter of 2008 was
the average debit card transaction value of £44.95, down 0.8
percent compared with the same period in 2007. By contrast the
average value of credit card transactions increased by 2.4 percent
to £64.51.

Based on ATM data, cash lost ground in the
second quarter of 2008, withdrawals falling almost 0.9 percent to
£45.9 billion. Cheque use also continued to fall, with volume down
10.1 percent to 257.4 million and value down 5.4 percent to £276.9
billion.

Volume via the Faster Payments system, launched
on 27 May and still being phased in by banks, totalled 4.17 million
in June with a total value of £2.27 billion.