Over the summer spending on debit cards rose above the level of spending with cash as these cards are gaining in popularity, for many even considered better than credit cards.
Debit cards are growing at break-neck speed. The number of purchases rose 10% this summer compared to last and the amount spent rose almost 11%.
Debit cards were used three times more frequently than credit cards in 2010 Q3. Even withdrawals from cash machines fell some 1.5% in this quarter, compared with the same period last year.
Sandra Quinn, Director of Communications, Payments Council explained: “Cash is too cumbersome for many consumers these days – they prefer a card for anything more than the smallest transactions.
We now expect our debit cards to be accepted everywhere we go – in pubs and clubs, at the corner shop, online and on the high street. Having quickly supplanted cheques, then claimed the scalp of credit cards, they have now usurped cash’s throne too.”
Basically people now have more choices. That said, cheques are rarely used to pay for everyday things and conscious of the need to repay credit borrowed, consumers are increasingly looking to use debit cards rather than credit cards.
Among electronic transfers, Bacs were flat in real terms in the third quarter, and CHAPS fell slightly in real terms.
The big change was in Faster Payments which rose 53% in value terms and 42% in volume terms, as more banks joined the system and in September the maximum value threshold for internet and phone payments rose from £10,000 to £100,000.