Over the last ten years payment cards have changed significantly our payment behaviour and ergo how we live. For example, card spending in pubs has increased five-fold from £1 billion in 2004 to £5 billion in 2014, according to a new UK Cards Association report.
It is the first ever publication of a decade of whole-market card spending data and reveals a huge growth in spending using cards, from £270 billion in 2005 to £566 billion in 2014. Debit cards accounted for 58 per cent of these transactions in 2005, rising to 71 per cent in 2014.
Card spending overtook cash spending back in 2004 and in the last ten years the effect of this is pronounced. Not only are we spending five times as much on card in pubs, we are also spending nearly twice as much in supermarkets, from £51.2 billion in 2005 to £99.5 billion in 2014. However, at the same time the average supermarket transaction fell from £31 in 2009 to £25 in 2014. That’s because the increasing ubiquity of cards has led to people making more frequent, more local shopping trips instead of the big weekly shops.
“These figures show for the first time how our spending patterns have changed and the central role payment cards have played in this. Today we think nothing of paying for a coffee and a sandwich with a contactless payment card or streaming films on a smartphone which is also enabled for mobile payments. This is so different to a decade ago when we carried more cash and shopped in high street stores,” said Richard Koch, Richard Koch, head of Policy at The UK Cards Association.
Are you not entertained?
The rise of online card transactions has also changed not only how we take in entertainment, but also what type of entertainment.
The Cards Association said there has been a drastic decline in spending at record shops, down 71 per cent. Video stores sales also went down, by half (49 per cent) as consumers moved to online streaming services, supported by increasing smartphone and tablet ownership. There were 1.3 billion online transactions in 2014, amounting to £119 billion. Around a quarter of all online transactions are now at entertainment websites, equating to 8 per cent of all spending online.
However, as cards take away, they can also give back. Richard Koch said that “cards are accepted in more places than ever before” and shops that have made the upgrade have seen a surge in card spending over the last decade. Vinyl is actually enjoying a resurgence and in 2014 was valued at £26m, up from just £3m in 2009. In fact, Tesco has begun stocking LPs again, marketing them as great Christmas gifts. Whilst there are many factors for the resurging popularity of vinyl, introduction of card-accepting terminals into record stores that traditionally only accepted cash is certainly one of them.
Another example is that of the baker’s. In 2005, consumers spent £3m on cards at the baker’s; in 2014 that number jumped up to £28m.
Restaurants were another of the key beneficiaries of increased card spending within the entertainment sector, taking £8.6 billion in 2005, rising to £22.2 billion in 2014. The entertainment sector also saw the strongest rate of growth, with the number of card transactions rising from 500 million in 2005 to 1.9 billion in 2014.
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Just under twenty percent of all card purchases are now being made on contactless cards, according to new data from the UK Cards Association.