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Contactless transactions take UK debit and credit card use to record high – The Guardian

A record number of payments took place by credit and debit cards in June, fuelled by the continued popularity of contactless transactions.

UK Finance, the new trade body for the banking industry, said almost 1.4bn card payments were made during the month. The 12% increase was the biggest annual growth in the number of payments since June 2008.

The data follows recent figures from the British Retail Consortium that found cards now make up more than half of all retail purchases.

Contactless cards were introduced 10 years ago and their increasing usage appears to suggest customers have overcome their initial suspicion about tap-and-go payments. In June, a record 34% of card transactions were contactless compared with 33% the previous month.

A year ago, UK Finance data showed contactless payments made up around 18% of card transactions.

Richard Koch, head of cards at UK Finance, said: “Contactless payments accounted for a third of transactions in June with consumers continuing to use their cards for lower-value purchases. While spending recorded a relatively modest monthly growth, the number of transactions rose at a faster rate, with some 46 million card purchases made every day.”

Around £57.1bn was spent via cards in June – up 0.3% on the previous month and 7.2% higher compared with a year earlier – with £40.6bn via debit cards.

But the average transaction value on all card payments fell 16p to £41.36 in June, the lowest level since June 2000, as consumers become accustomed to using cards for smaller-value purchases. A year ago, the average value was £43.53; it peaked at £50.55 in July 2011.

The amount of credit card spending was £16.5bn – around the level it has been at for the past few months – out of the £57.1bn total.

Credit card lending is one part of the consumer credit market – which includes personal and car loans – that is being closely watched by regulators. The Bank of England’s director for financial stability, Alex Brazier, recently warned lenders were “dicing with a spiral of complacency” and that lending standards “can go from responsible to reckless very quickly”.

Last month, Bank data showed that unsecured consumer lending, which includes credit cards, overdrafts and car loans, grew by 10% in the year to June. The figures showed the total had reached almost £201bn, topping £200bn for the first time since the global crisis in 2008.

Contactless transactions take UK debit and credit card use to record high – The Guardian

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