Contactless debit card payments reach record high
The contactless payments accounted for 62% of all debit card transactions for the month as Brits took advantage of the £45 spend limit.
Just under half (45%) of all credit card transactions were contactless, with those in August increasing 14.6% compared to the previous month.
With the launch of the government’s Eat Out to Help Out scheme in August amid easing lockdown restrictions, the total spend on contactless card transactions for the month was £8.2bn.
According to UK Finance, the total number of contactless credit and debit card transactions rose 7% in the month to August.
Overall, there were 1.2 billion credit and debit transactions in August with the volume of spending falling slightly with 1.3% fewer transactions. Compared to August 2019, transactions were down 27.7%. The total spend of £51.6bn was 3.8% down from July and 14% less than last August.
However, UK Finance noted that the value of transactions made by UK debit cardholders remained strong, with total spending on debit cards amounting to £58.4bn, just 1.2% below the record total value seen last month and 12.5% higher than August 2019.
August also saw the UK’s annual growth rate of outstanding balances on credit cards continue to decline, falling 12.6% over the twelve months to August as a result of repayments outstripping new borrowing in the year.
Eric Leenders, managing director of personal finance at UK Finance, said: “As lockdown restrictions continued to be eased in August, we saw record numbers of customers choosing to make contactless payments using debit cards. Contactless card transactions using either debit or credit cards also increased compared to July, suggesting that consumers are taking advantage of the £45 contactless spending limit.
“Meanwhile, the amount of spending on UK debit cards fell slightly in August following a record high in July but remained strong at £58.4bn.
“The percentage of credit card balances attracting interest and the annual growth rate of outstanding balances on credit cards continued to decline – the latter dropping by 12.6% over the twelve months to August.”