Debit card purchases reached record heights last summer, according to the latest figures from UK Finance, as coronavirus continues to change the way we spend.
UK consumers spent a collective £59.1 billion on their debit cards in July, up almost 18% compared to the previous month and an increase of 9.4% compared with July 2019.
Changing spending habits
The dramatic increase is due to a shift towards online shopping triggered by the pandemic, while there’s also been a rise in the number of higher-value contactless transactions since the banking and finance industry increased the contactless limit to £45 earlier in the year.
The average value of a contactless payment was £12.08 in July, up from £9.42 in February.
The data from UK Finance also revealed that, while credit card spending in July was up 15% on the previous month at £15 billion, it was almost 25% below the levels seen last year.
Eric Leenders at UK Finance said that consumers may be choosing to make purchases using their debit card rather than their credit card amid ongoing economic uncertainty.
He added there were also ‘fewer opportunities’ to make the high-value purchases that benefit from the additional protection a credit card offers, such as flights, holidays abroad and white goods.
The recent data supports the government’s concerns around how the pandemic has accelerated the ongoing demise of cash because of fears over hygiene. It is currently looking at ways to reverse the trend and ensure those who want access to cash can get it.
One leading proposal includes shops offering ‘cashback’ without consumers having to make a purchase.