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Contactless spending hits yet another record

Contactless spending hits yet another record

Category: Banking

Updated: 06/10/2016
First Published: 06/10/2016

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Contactless spending is going from strength to strength, hitting new records on a seemingly monthly basis. Indeed, the total contactless spend in the first half of 2016 had already surpassed the total for the whole of last year, and the monthly total has continued to increase ever since. As a result, it'll come as little surprise to learn that it's broken yet another record, with monthly contactless spending having passed the £2bn mark for the first time.

Figures from The UK Cards Association show that contactless payments totalled £2.1bn in July, driven by a rise in the number of contactless transactions of almost 10% in the month to reach 240 million. Indeed, 19% of all card payments during the month were made using contactless technology, up from 18% in June, highlighting the growing uptake of this form of spending.

This impressive growth is further highlighted by the fact that the £2bn milestone comes just four months after contactless spending topped £1.5bn (it hit £1.508bn in March) and just a month after a new half-year record was set (contactless payments totalled a record £9.27bn in the first six months of the year), with more and more people realising the convenience of this form of spending.

"Consumers' adoption of contactless continues apace, with the number of contactless payments jumping by a tenth in just one month," said Richard Koch, head of policy at The UK Cards Association. "At over £2bn, contactless spending in July was more than three times higher than the same period last year."

Yet it isn't only this area where we can see growth. It seems that card spending as a whole is also on the rise, with the days of needing to fish around in wallets and bags for those pesky pieces of loose change becoming a thing of the past. Indeed, total card spending also reached a monthly record by rising to £53.9bn in July – an increase of 4.6% from July 2015 (£51.9bn) – with over 1.2bn card purchases being made.

Debit cards accounted for the majority of the rise in monthly spending, with the total standing at £38.4bn for the month, up 5.4% year-on-year. Credit cards saw a boost too, despite accounting for the smaller share of the market – total credit card spending stood at £15.5bn, an increase of 2.9% from July 2015. And what about online spending? This also saw impressive growth, with the monthly total of £12.6bn marking a huge annual rise of 12% as shoppers flock to the online arena.

Interestingly, the figures also seem to reflect the impact of the EU referendum, highlighting the effect it's having on the nation's wallets. For example, hotels saw the largest increase in overall card spending between June and July, rising by 25% to £2.1bn, arguably as the lower value of the pound encouraged more domestic and international travellers to holiday in the UK.

Conversely, that same issue has likely driven the reduction in the value of card spending on foreign currency and travellers' cheques, which fell by 14% over the month to stand at £807m. This in itself follows an increase of 27% the previous month, arguably as travellers hoped to beat the uncertainty by planning ahead.

But, no matter what you're spending your money on, are you getting in on the contactless action? It could be high time to get involved – the convenience of this form of spending means its popularity is understandably soaring, and with contactless technology now being near standard for the majority of debit and credit cards, there's no reason not to give it a go.

Don't have a card that fits the bill yet? Speak to your banking provider to see if you're due an upgrade, but if not (or if you're not happy with your provider for any other reason), make sure to compare current accounts and credit cards to see if you can find a better, and contactless-embracing, deal.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.