New statistics show spending remains static over last quarter
30 Nov 2009
Latest quarterly statistics, issued today (30th November 2009) by the Payments Council, using data from The UK Cards Association, Link, Bacs, Cheque & Credit Clearing Company and CHAPS Co, provide an account of all spending by plastic card, cheque, cash and automated payments over the last six years, and confirm little change beyond the usual variance to consumers' payment habits, despite the difficult economic conditions.
Quarterly figures reveal that:
• The number of plastic card purchases - which includes debit and credit card purchases combined - rose this quarter by 6.9% and the value of purchases rose by 4.3%, compared with Q3 2008.
-Credit card spending by value fell by 0.7% although the number of credit card purchases increased by 2.5%.
-Debit card spending by value rose by 6.9% and 8.5% by volume when compared with Q3 2008.
• Gross credit card lending, which reflects all new spending on credit cards and includes interest, was 7.5% lower than in the 3rd quarter 2008. Reflecting this lower spending, repayments also fell but by 4.7%. Consequently the annualised ratio of repayments to new lending increased to 98.1% compared with 96.4% in Q3 2008.
• Debit cards dominated non-cash spending for the first time. Previously when reviewing all payments not made by cash, Direct Debits and Direct Credits made up the greatest number. However, this quarter debit cards accounted for 40.2% of all non-cash payments, whereas Direct Debits and Direct Credits made up 39.1%, when combined.
• Cheque and credit clearing volumes fell by 13% and values by 19%, between Q3 2008 and Q3 2009.
• The volume and value of Faster Payments rose by 11% and 12% respectively during Q3 2009, when compared to Q2 2009 - demonstrating the ever increasing use of the new service from one quarter to the next. This quarter, 47% of all standing orders and 73% of telephone and online banking payments were made using the Faster Payments Service.
• CHAPS Sterling volumes and values fell, as they were down 6.3% and 12.5% respectively from the corresponding quarter last year.
• The number of cash machine withdrawals rose by 0.5% compared with Q3 2008, whilst the amounts withdrawn fell by 0.7%.
Sandra Quinn, director of communications comments:
"Whilst these figures provide total payment volumes cleared and include both personal and business payments, it is still possible to glean from this the average consumer's spending behaviour.
"Contrary to reports of cardholders turning to their credit card during tough economic conditions, these statistics confirm what has been a trend for a couple of years. Spending on credit cards has remained relatively unchanged and interestingly we are still repaying proportionately more of our debt than we were three years ago. Similarly, cheque use continues to decline since its peak in 1990.
"Whilst it is always difficult to anticipate next quarter's spending, we expect consumers to continue to reach for their debit cards over the Christmas period and reduce their reliance on cash and cheques as a result."
ENDS
For further information, contact the press office on 020 7711 6316 or press@ukpayments.org.uk
NOTE TO EDITORS
The Payments Council is the organisation that sets strategy for UK payments. It has been established to ensure that UK payment systems and services meet the need of users, payment service providers and the wider economy.
The Payments Council has three core objectives: to have a strategic vision for payments and lead the future development of co-operative payment services in the UK; to ensure payment systems are open, accountable and transparent; and to ensure the operational efficiency, effectiveness and integrity of payment services in the UK.
The Payments Council is a membership organisation funded by its members, with an independent chairman. It was set up in March 2007 and currently has 25 members; on the Board sit 11 banking representatives and four independent Directors as well as the chairman. The principal UK payment schemes – Bacs, CHAPS and Cheque & Credit Clearing Companies, LINK Scheme as well as the UK Domestic Cheque Guarantee Card Scheme, the Belfast Bankers' Clearing Company Limited and the Currency Clearings – have entered into a contract with the Payments Council which sets out their respective rights and duties towards each other. Under the contract, schemes are required to report regularly to the Payments Council Board: the Board is able to make decisions that are binding on scheme members in order to implement its strategy.
Approximately 15% of CHAPS payments are linked to house sales and 21% of CHAPS payments are linked to payments within the financial sector.
We anticipate cash and cheque spending to fall by over 4% to £17.6 billion, during December 2009.