Debit Card Report April 2015

Transcription

1 Debit Card Report April 2015

2 Monthly debit card report April 2015 Apart from actual card numbers the data referred to depict the underlying trend following seasonal adjustment using X- 12 ARIMA. The X-12 ARIMA ly seasonal adjustments include trading days and leap years. Growth rates are ly. The 2014 data set has been fully reconciled with annual data published in UK Payment Statistics Number of cards Debit cards represent the most convenient method of obtaining funds from a person s account and also rank among the most widely accepted methods of payment. Most issuers provide a debit card as standard when new accounts are opened. Their significance has further been boosted by the popularity of smartphone and tablets, making online payments more accessible, and the growing acceptance of contactless cards. By the end of 2014 almost 49 million people held a debit card, representing around 91% of the UK adult population. Thus there is limited scope for large scale increases in future growth of the cards in issue. At the end of April 2015 the debit cards in issue stood at 96.7 million after declining by 0.2% over the. This follows on from above trend growth in January of 0.8% and figures of 0.1% and 0.3% in February and March respectively. By comparison, growth in the contactless cards in issue is strong with more cards being re-issued with contactless functionality and new cards provided with this feature as standard. According to the latest data reported to The UK Cards Association, the debit cards with contactless functionality in circulation rose by 13% between January and April to reach 43.4 million, accounting for around 45% of all debit cards, up from 28% a year ago. Chart 1 Number of debit cards and contactless debit cards in issue Domestic spending Near universality in the holding of debit cards, their high propensity of use compared to other non-cash payment methods and growing acceptance by merchants has meant that they continue to acquire market share was significant as cash payments fell to 48% of total payments, the first year they have fallen below 50%. Debit cards accounted for the next highest share of payments with 22%, up from 20% in The Payments Council predict that the future decline in cash market share will mostly be taken up by debit cards. Their figures reveal that by 2024 cash use will decline to 29% of total payments while that of debit cards will increase to 36%. These debit card trends have been evident in the growth in s over the past few years. Debit card volumes grew 10.0% in 2014 to reach 9.2 billion; this compares to growth of 8.3% in Meanwhile debit card s rose 8.4% to 408 billion, down from almost 9% a year earlier. These strong patterns of growth have continued into the first part of Between January and April 2015 volumes grew at an average ly rate of 1.0% to reach 829 million. At the end of April, s stood at 37.5 billion following an average ly growth rate of 1.5% since January. Debit card spend has grown even in times of economic hardship. This is a sign of how important debit cards are and how useful they have become to consumers as a payment tool. Over the past few years there has been a migration of online card payments from laptops and PCs to smart phones and tablets, particularly among younger adults. These mobile devices have been driving a significant proportion of the growth in debit card spend because they allow real time access to the internet regardless of time or location. Some merchants encourage online spend by offering cashback rewards for doing so. Page 2

3 Contactless technology has also had a positive impact on debit card payments as it gains popularity with both consumers and merchants. The most high profile adopters of contactless cards have been Transport for London (TfL). Anecdotal evidence suggests that by making payments for journeys on the TfL network more efficient, contactless cards encourage passengers to take more journeys 1. Furthermore, it is possible that some debit card purchases are being driven by the pursuit of cashback rewards provided by the issuer 2. Chart 2 Domestic ly debit card spending International spending Cross-border s have grown at a much faster rate than domestic s over the past few years, albeit from a much lower base. Cross border purchases grew 56% in 2014 to 979 million, compared with growth of 40% in Meanwhile cross border spending increased by 42% to 25 billion up from 22% in A significant proportion of this growth was accounted for by overseas sterling s (OSTs), i.e, payments made in the UK and processed abroad. Another proportion of this growth in cross border s has been driven by advantages of using these cards abroad, especially when compared to other methods of payment. Debit cards are more convenient to hold than Travellers Cheques or cash. Transaction fees for debit card purchases also tend to be cheaper than for credit cards. In fact, some issuers do not charge fees for cross border purchases made with debit cards. Between January and April of 2015 there was average ly growth of 0.8%. This increased cross border purchases to 99.4 billion and compares with average ly growth of just over 3% for the previous six s. Meanwhile cross border spending reached 2.6 billion at the end of April following ly average growth of 1.4% compared with 3.4% for the previous six s Page 3

4 Chart 3 International ly debit card spending s The domestic average (ATV) has risen continuously from a figure of in October 2014 to in April The Domestic ATV has stabilised over the past few years ranging between 40 and 50 such that the long term trend appears to be flat. Given how synonymous debit cards are with bank accounts and how ubiquitous they are it is likely that this trend masks huge variations in payments. The international ATV has also been on a continuous upward trend since October 2014 increasing from to in April This bucks the continuous downward trend that has been evident for a years. Chart 4 Monthly average s Domestic spending The average ly spend has been increasing since January 2015, from 373 to 388 in April When considering the average s per, this measure has also increased continuously and incrementally from 8.3 in January 2015 to 8.6 in April These two domestic measures have increased each year. These increases are the result of greater rate of debit card spend enabled by technological improvements in payments with contactless and online spend the most high profile and notable examples. Page 4

5 Chart 5 Per card ly averages (domestic spending) International spending When compared to domestic, international spending figures seem low. That being said, average spend per debit card rose from in January 2015 to at the end of April Meanwhile the international s also increased, from 1.00 in January and February to 1.03 in April On the surface, the purchases may seem low but are plausible when multiple holdings of debit cards are taken into consideration. Around 47% of the debit card holding population, own two or more cards. As secondary and further additional cards are typically used less frequently, this depresses the per card averages. Chart 6 Per card ly averages (international spending) Tables Table 1 Cards in issue Table 2.1 Domestic retail s, all cards Table 2.2 Domestic retail s, Visa Debit, Debit MasterCard and Electron cards Table 3.1 International retail s, all cards Table 3.2 International retail s, Visa Debit, Debit MasterCard and Electron cards Contact: Nigel Burt; nigel.burt@ukpayments.org.uk camis@ukpayments.org.uk or Page 5

6 Debit cards Table 1 Cards in issue Number of cards millions All cards 1 Visa Debit Electron Debit MasterCard 2 Solo 3 Number % Change Number Number Number Number % % % % % % % * % * % * % * % * Visa Debit, 4 Debit MasterCard Electron Apr % * * May % * * Jun % * * Jul % * * Aug % * * Sep % * * Oct % * * Nov % * * Dec % * * Jan % * * Feb % * * Mar % * * Apr % * * 1 The 2014 data set has been fully reconciled with annual data to be published in 2015 UK Payment Statistics. 2 Includes Maestro cards. 3 The Solo scheme terminated on 31 March Solo cards are included with Debit MasterCard from Visa Debit and Debit MasterCard figures are combined from * Indicates data are not available. Institutions currently issuing Visa Debit/Electron and Debit MasterCard are: AIB Bank (FT) Lloyds Banking Group Bank of Cyprus National Australia Group Bank of Ireland Nationwide BS Barclays Bank Virgin Money plc C. Hoare & Co The Santander Group Citibank Standard Chartered Danske Bank The Co-operative Bank Harrods Bank The Royal Bank of Scotland Group HSBC Bank plc Tesco Bank Investec Bank TSB Bank MEMBER CIRCULATION Page 6

7 Debit cards Table 2.1 Domestic retail s 1 All cards 2 All cards, unadjusted data Volume Value ly spend s per Volume Value Millions millions Millions millions , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , , ,278 Apr , ,228 May , ,629 Jun , ,324 Jul , ,230 Aug , ,098 Sep , ,405 Oct , ,309 Nov , ,404 Dec , ,739 Jan , ,882 Feb , ,727 Mar , ,428 Apr , ,256 1 Excludes cash withdrawals from ATMs and at bank counters. 2 Depicts the underlying trend following seasonal adjustment using X-12 ARIMA. The X-12 ARIMA ly seasonal adjustment takes into account trading days and leap years. MEMBER CIRCULATION Page 7

8 Debit cards Table 2.2 Domestic retail s 1 Visa Debit, Debit MasterCard 2 and Solo cards: unadjusted data Total for year to date Total for year to date ly spend s per Volume millions Value millions Apr ,872 34, , May ,641 34, , Jun ,402 34, , Jul ,172 35, , Aug ,913 32, , Sep ,645 33, , Oct ,444 35, , Nov ,225 33, , Dec ,117 37, , Jan ,724 38, Feb ,462 33,580 72, Mar ,313 39, , Apr ,131 38, , Electron cards: Non Seasonally adjusted Total for year to date Total for year to date ly spend s per Volume millions Value millions Apr May Jun Jul , Aug , Sep , Oct , Nov , Dec , Jan Feb Mar Apr Excludes cash withdrawals from ATMs and at bank counters. 2 Includes Maestro cards. MEMBER CIRCULATION Page 8

9 Debit cards Table 3.1 International retail s 1 All cards 2 All cards, unadjusted data Volume Value ly spend s per Volume Value Millions millions Millions millions , , , , , , , , , , , , , , , , , , , , , ,558 Apr , ,813 May , ,988 Jun , ,143 Jul , ,283 Aug , ,351 Sep , ,240 Oct , ,374 Nov , ,415 Dec , ,857 Jan , ,410 Feb , ,215 Mar , ,511 Apr , ,517 1 Excludes cash withdrawals from ATMs and at bank counters. 2 Depicts the underlying trend following seasonal adjustment using X-12 ARIMA. The X-12 ARIMA ly seasonal adjustment takes into account trading days and leap years. MEMBER CIRCULATION Page 9

10 Debit cards Table 3.2 International retail s 1 Visa Debit, Debit MasterCard 2 and Solo cards: Unadjusted data Total for year to date Total for year to date ly spend s per Volume millions Value millions Apr ,799 6, May ,972 8, Jun ,126 10, Jul ,265 13, Aug ,333 15, Sep ,222 17, Oct ,353 20, Nov ,392 22, Dec ,832 25, Jan ,389 2, Feb ,196 4, Mar ,490 7, Apr ,496 9, Electron cards: Non Seasonally adjusted Total for year to date Total for year to date ly spend s per Volume millions Value millions Apr May Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Excludes cash withdrawals from ATMs and at bank counters. 2 Includes Maestro cards. MEMBER CIRCULATION Page 10