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 according to new analysis by UK Finance

Card spending data also revealed 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.

The total number of contactless card transactions fell slightly by 1.1 per cent compared to August, and was down by 5.3 per cent compared to September 2019. The value of contactless spending, however, was 18.1 per cent higher than in 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.

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.

The number of transactions made by UK debit cardholders reached 1.6 billion in September, a 2.9 per cent increase on the previous month – and a 6.1 per cent increase on September last year. The total spend of £58.5 billion was 0.2 per cent higher than August, but 12.8 per cent higher than last September.

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, UK Finance, said “September saw the proportion of contactless debit card payments hit a record high for the second month in a row, rising to 64 per cent of total transactions in August. The value of overall contactless spending was also up by over 18 per cent compared to the same period last year, as consumers made further use of the increased £45 contactless spending limit.”

“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. The total spend of £58.5 million was much the same as in August, but 12.8 per cent higher than in September last year. Given the popularity of debit card spending, the annual growth of outstanding credit card balances continued to contract, dropping 14 per cent over the year to September as repayments continued to outstrip new borrowing.”