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We take paying at a card terminal for granted as customers. Just twenty years ago, the majority of us still used cash when we went out to the shops. That’s changed dramatically since the digital revolution and most of us now go equipped with our debit or credit cards. More and more often, new technology such as ApplePay is becoming common – you don’t even need a card, you just press your smartphone to the terminal and payment goes through.

Perhaps the biggest challenge for businesses is finding online payment processing that is highly secure and protects customers when they come onto your site and want to buy something. Getting this wrong can be catastrophic.

In the online world, bad news travels quickly. If your online payment system is compromised, customers are likely to take to social media to complain rather than coming direct to you for a resolution. That can give your business a difficult reputational problem to overcome – if people think you are unreliable, they are not going to spend money or give their personal details.

The problem is compounded by the fact that business need to give their customers effortless ways to pay. This has developed from the traditional cash payment to cards, mobile phones and even direct online transfers from bank accounts.

Businesses, whether they are simple startups or large corporations, need to be security minded. You may think that if you are a small business then you are less at risk. Why would a hacker be interested in you, after all? Nothing could be further from the truth. Malicious programs are generally directed at smaller business because they tend to have less in the way of security and are easier to get into.

Choosing the right service for handling card payments and online transactions is as important as working on the security of your own website or your bricks and mortar store. Pick the wrong payment processing service and you could soon find yourself facing customer complaints if things take a bad turn.

In truth, keeping up with the hackers and phishers out there is a constant battle and reputable banks and financial services have whole teams devoted to keeping on top of the latest threats. That security is constantly being updated and it’s worth looking at any merchant service to make sure that it is doing all it can to reduce risk.

Even with the best security in place, there is no guarantee that the service you use won’t be the target of an attack. Having a robust website security solution is imperative but so is choosing who you do business with – whether that’s a product supplier or your merchant service.

Tying your business to a bank that is less than reputable can have major ramifications – they are not likely to have robust security measures in place and you are highly likely to encounter problems if your system can be easily hacked. Our advice is never to take it for granted that these third-party services are as worried about security as your business. Check them out and make sure they take this key issue very seriously indeed.

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How we pay for goods has changed dramatically over the last few years and is continuing to evolve at a dramatic rate. For those businesses who are failing to keep pace with the latest technology, this presents a significant problem.

The answer to the question above is that your potential customer will find another outlet where they can spend their money how they want.

Cash

Although it’s been dropping away over the last decade or so, 14% of consumers are still using cash to pay for things like everyday purchases, including food. Most bricks and mortar stores accept cash and will continue to do so. But will we ever reach a time when it’s a thing of the past? At some point, maybe. For now, there are still people who carry around money in their wallets and purses.

Credit Cards

Credit cards have also shown a bit of a decline in recent times, most likely because we can now use debit cards which link directly to our bank accounts. High interest rates if you get on the wrong side of repayments is also an issue. People still use them for larger purposes, however, particularly if they want to pay back what they owe over a period of time.

Debit Card

Debit cards have certainly empowered consumers and we wouldn’t have the online ecommerce infrastructure we have today without them. These are also beginning to change with growing technology, including cards that can be simply touched to the terminal and release payment rather than having to key in a code. Consumers tend to prefer this method of payment because there is less risk of racking up a debt as there is with credit cards.

Wireless Transfer

The major change in paying at a store or online is with wireless transfer. This is one area where many store owners have been slow to catch up. Terminals that accept payments directly from mobile phones in store are beginning to increase but they are still something of a rarity in many places. The problem many businesses face is whether to embrace this new technology in the first place and how much it might cost. On the other side of the argument is how much it may cost in the long run if you don’t give your consumer the ability to buy in this way.

Online Payments

Ecommerce stores also need to provide a broad range of ways to pay if they are to attract the right customers. This can include adopting platforms such as PayPal and WorldPay which provide a good deal of flexibility as well as the now traditional debit and credit cards.

One key factor that businesses need to take into account, of course, is data security. This includes choosing the appropriate merchant bank and card payment system all of which can be minefield to navigate with the amount of options out there. Getting the best advice is important at this stage, whether you are just starting out with your business or looking to change your merchant services provider for an existing one.

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This trend shows no signs of slowing down. The credit payment adoption rate is expected to grow by up to 7 percent. This means that businesses that are still reluctant to accept credit and debit card payments can expect to fall even further behind as the trend towards contactless payments continues unabated.

It is clear that the decision two years ago to increase the amount a person can spend using card payments from 20 pounds to 30 pounds was not a bad one. The limit change led to an instant spike in the number of cashless transactions.

The impact of the increased use of card payments has been especially felt in supermarkets and restaurants. Pubs and bars have not been left behind either and have had to adapt their systems to be more adaptive to a society that is increasingly moving away from cash as the standard medium of payment.

Businesses that don’t accept card payments face a big challenge when competing with their competitors who do. According to statistics, they are not “in tune” with what the majority of customers want and risk falling behind and losing out on a lot of additional business.

Lower transaction charges

Part of the reason for the increase in card payment adoption rate is the reduction in transaction charges for both debit and credit cards. Data shows that in the last three years alone, overall charges have dropped by more than 6 percent. A high number of people are now comfortable using card payments to coffee, lunch and grocery bills. 

Preferences according to age-groups

There are notable differences in the use of card payments between different age groups. A survey was conducted by Worldpay on 2,000 consumers in the UK. The findings showed that a majority of people over the age of 45 still prefer cash as their method of payment. On the other hand, most 25-to-35-year-olds would rather never have to carry cash.

At the end of the day, all consumers want is to not have to worry about whether they have enough cash in their wallets or not. Whether it’s a coffee date or just another leisurely outing, all they want is to be able to pay in a quick and convenient way.

Ensuring card payments are secure

With the card adoption rates continuing to increase, there is an increasing need to ensure that these payments are safe for both the businesses and the customers. It is up to a business to ensure that customer’s information is kept safe. Customers trust the business which is why the feel comfortable enough to give their cards. The best way to do this is to comply with the highest data security standards possible.

Hackers are increasingly targeting card details. This means that business establishments have to up their game as card breaches are becoming an issue that can no longer be swept under the rug.

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What Do You Really Need?

The best place to start is with your own, individual business banking needs.

• Are you a store owner who wants to make sure you can accept cards when people come into your shop?
• Do you want a simple method that ties into your tablet or laptop or something more complex?
• How much do you want to be charged for the service?
• What range of cards do you need to be able to accept?
• Are you also operating online and want to tie up your payment service with your bricks and mortar store?
• Do you want a basic merchant service provision that can expand as your business develops?

There are plenty of issues to consider as a small business and it can often be useful to talk them through and get independent, impartial advice from someone who knows the industry.

Shop Around

Not all merchant services are born equal. There are also many of them out there to choose from.

It’s not a simple case of picking any one for your SME and expecting them to provide everything you need. Costs and packages vary which is why you need to be sure of what you need with any card payment system. As with all service purchases nowadays, you should be shopping around as much as possible to find the right deal for your business. Don’t just settle for the first merchant service you come across.

Ask Questions

There are plenty of questions to ask and you shouldn’t let any rep that contacts you simply run through their sales spiel without challenging them. Work out what could go wrong with the service – for example, what happens if a terminal breaks down? – and ask these important questions. There are other more technical issues to understand such as how the merchant service gateway works and what useful features they offer that sets them apart from competitors.

The other area that you obviously need to check out for your SME is the range of fees that a service charges for card payment solutions. These can vary quite considerably between providers and they are not always immediately obvious.

Do Your Research

That means you need to know something about the industry. There are plenty of resources online about choosing the right card payment service and what questions you should be considering. Once you know what you are talking about, you can quiz any rep about what happens if certain things go wrong or if you need to change your service package.

Check the Support

Unfortunately, it’s one area that many merchant services are falling down on at the moment. You have a problem and want to get in contact with someone but find it difficult simply to pick up the phone and get through. Support is important when you choose any service and this is one area that you need to check out thoroughly. You want it to be readily available and helpful once you get the support on the other end of the line.

Getting good advice when choosing your card payment service is vital and something that can benefit your SME immensely. At acceptcardpayments.com we provide a comprehensive and friendly advice service that puts you in contact with the bespoke merchant service that your business needs. Ending up with a poor merchant service and card payment solution can not only badly impact on your business it can cost you money that could be better spent elsewhere.

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Starting a business is easier than ever. Confidence is currently high when it comes to entrepreneurial spirit and endeavour. Many people, from all walks of life, have decided to take the plunge and start a new venture.

Some of us are doing it from home, using our own unique set of skills to create the services and ecommerce solutions that people are looking for. Others are opening shops that provide niche products to the local community or sell to customers across the world.

In the UK alone, more than 2 million small businesses have started since the beginning of the millennium. The set-up costs are often low and the amount of support available through various outsourcing opportunities has expanded in recent years, including for IT and banking services.

That doesn’t take away from the stark fact that many new businesses still fail within their first five years. But we’re certainly getting the entrepreneurial bug and it’s boosting the economy.

One issue that any business needs to work out is how it accepts payments from its customers.

With the rapid development of online shopping and most of us now owning hi-tech smartphones that allow us to buy on the move, making it easy to pay needs to be a priority. Providing a simple to use card payment solution for your customers online or in your shop has a number of advantages:

• The easier you can make it, the more likely a customer is to return to your site or shop and buy other products or hire your service again.
• Consumers expect easy pay now, whether that’s linking up to their card details or Paypal account online or when they step into your store and decide to buy something using their new contactless card.
• People are carrying less cash around with them. More of us work with various tools such as WorldPay that allow automatic debiting from our accounts.
• That’s because it’s so easy and convenient to do this. If you’re shop or office only works on cash, that means your customer must go and find a machine to draw out some money.
• Having a good, secure card payment system through a merchant service means you open up your business to more of the world.
• Payments by card are growing both online and in store and staff are handling less cash than they have ever done before. A good payment card service therefore makes your business flexible.

Finding the Right Card Payment Solution

As with many other industries, the merchant services sector has grown with the online business world in recent years. It can be confusing and difficult to find the right service that is tailored to your specific needs and which operates within your budget restrictions. Added into this is the fact that many merchant services don’t provide the personal level of customer help and advice that allows business owners to make good operational decisions.

At acceptcardpayments.com, we’ve put together the perfect advice and guidance that helps you choose the best merchant service for your needs, whether you’re a small start-up or a successful, growing business, bricks and mortar store or running and ecommerce site. Card payment should be simple for everyone to use including you and your business – you want something that handles a wide variety of card types and can be set up with little or no trouble while keeping your customers secure.

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We are now dealing with customer data, so a secure card payment gateway is vital when considering how to take card payments online. We also need to clarify what you mean by how to take card payments online. Is it via your website that you are looking to take credit card, debit card payments?

Following this cycle, we ask how to take card payments online. Payments Via a Website, then next choice is a Hosted Payment Page or Integrated Payment page

Explanation of a Hosted payment page would be when the customer wants to pay, they are directed to a secure hosted payment page which will appear on your site. You do not handle or transmit the card data. This often works for a new online business, as transactions are processed through a ready-made payment page.

How to take card payments online using an Integrated Page, this is where a page sits on your website. This means that you will have to meet the Data Security Standards. The advantage is it gives you complete control over the look and feel of the payment page, and the customer will not leave your website giving a seamless experience. If you are a business with a large online customer base this may work better than a Hosted payment page.

Get the correct process for your business and your customers. Contact ACP today, and see if we can help you to understand how to take card payments online. We offer a free quote or give us a call on 0333 305 4500.

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There are many advantages to taking credit card payments for small business. It is not just about the face to face payments side of thing, but taking credit card payments as a small business means that you could increase sales and also potentially take payments outside of business hours.

Things have changed and when considering taking credit card payments for small business you need to bear in mind the following factors:

• Where does your client base come from?
• Face to Face also known as Card Holder Present. If so then we need to consider equipment https://acceptcardpayments.com/ways-accept-credit-cards/ or will it mainly be over the phone or internet or a combination of both?

One mistake made when looking at taking credit card payments for small business is, considering what works best for you, but what works best for your existing and potential clients. Think about what will help to build up business. So how do you want to do business with your customers, or how does your customer want to pay you? In Person or Remotely 

Taking credit card payments for small business in person, a business with a physical location is historically been done via a desktop device also known as Countertop which will be covered in best credit card terminal for small business or Portable Terminal. These will be covered in portable credit card machines for small business.

Taking credit card payments for small business via Online Payments, ideal for businesses looking to sell online or an existing business with a website.

Taking credit card payments for small business by Phone and Mail. Used when customer not present. These are easy to set up and, will work with laptops, tablets and smartphones.

Taking credit card payments for small business where you are out and about Mobile. Your main business could be Shows, Festivals or Market stalls. Also work from home where payment is required and Taxi Drivers or Mini Cabs.

As promised the disadvantages to taking credit card payments for small business:

Face to Face

• Costs could depend on volume
• The value and type of card used for payment could affect costs
• Needs a internet or phone line connection

Online Payments

• May require some changes to be made to your website
• Transaction costs may depend on volume
• Some systems have extra steps that can deters customers from continuing

Portable Terminal

• There may be additional costs for portable card readers
• Think about your internet
• Has to connect to base unit via Bluetooth or Wi-Fi.
• Range may vary depending on location

Mail Order Telephone Order

• You may not have a signed receipt.

Mobile

• Transaction costs depend on volume
• Not suitable where mobile data single is weak
• Data charges may apply.

We feel the taking credit card payments for small business helps in ensuring that you are responding to your customer preferences and needs. People expect to be able to pay by card.

Taking credit card payments for small business can help lost sale opportunities.

Why not contact ACP about taking credit card payments for small business, this could be one of the best decisions your business makes. Simply fill out the quick quote form or call us on 0333 305 4500.

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When you are doing your searches or comparisons, one of the first things you will come across is the term Virtual Terminal, so how does this relate to telephone credit card processing? Well a virtual terminal is basically the web version of a physical credit card terminal.

How do they work:

1. You log in via a web browser to your secure card payment page.
2. Input the card details manually.
3. Click process payment.

If you have decided to look into the telephone credit card processing side of things it must serve your needs. If you are able to accept card payments quickly and easily, it will show a high level of professionalism to the customer on the phone.

Things to consider when thinking about applying for a telephone credit card processing service:

Your telephone credit card processing payments are they one off payments, or do you need to be able to schedule payments for the future?

You will see no contract used a lot when looking into telephone credit card processing. You will need to know which is best option for you, as No Contract can often be placed with higher rates. One very important question is, what do you believe your annual payments will be via the telephone credit card processing side.

Having a good payment process means that you will get paid quicker. Invoices can be paid instantly and securely over the phone via a telephone credit card processing service which can help speed up payments.

With a telephone credit card processing service such as a Virtual Terminal your business can accept credit and debit card payments by phone. This is accessible from a PC, smartphone, tablet or any compatible device.

Make sure that you know the process well because if you are accepting payments over the telephone, you need to make your customers feel secure.

If you use a payment gateway, ensure that the Virtual Terminal will be compatible. If you are unaware of the gateway function please see https://acceptcardpayments.com/card-payment-terminology/. All you need to do is simply enter the card details and cardholder details into a secure card payment form, this will connect to your payment gateway for authorisation. A transaction should only take seconds to process and a response is sent back to you for confirmation. Telephone credit card processing can be that simple.

There are factors that need to be considered when looking at telephone credit card processing. So why not contact ACP today, and see if we can help? We offer a free quote for your telephone credit card processing needs, or if you prefer you can call on 0333 305 4500.

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It is so important that credit card payments online for small businesses are available. The reason credit card payments online for small business came to mind was due to the fact it is a subject which gets mentioned a lot. Card payments increases the level of impulse buying by customers.

We now expect the same level of service from the small business as we do from the larger ones, and at times even better. But when it come to the subject of credit card payments online for small business, the end customer expects the same card payment options.

It is estimated the that in the UK two thirds small and medium-sized enterprises (SMEs) are still not accepting card payments.

Why are small businesses still not accepting card payments?

In some cases, it is the preconception that it will be a hassle and the cost implication that settles the choice to not applying to accept card payments. Why not find out the real costs involved in accept credit card payments online for small business: Simply get a free quote to accept credit card payments online for small business here.

If you are asked if you accept card payments, and you currently don’t accept card payments then there is a possibility you may lose that customer. If you need to take credit card payments online for small business and are unsure about your options, simply speak to us today on 0333 305 4500 for free independent impartial advice today.

Everybody recognises the importance of small businesses to the UK economy, we also recognise that the ability to take credit card payments online for small business is an important part of growth.

So, if you are one of the business who don’t take payment online contact ACP and let’s see if we can help. If you have a process in place for taking credit card payments online for small business, then contact ACP and let us find the best price and best supplier for merchant services for your business.

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Credit and debit card purchases are quickly becoming the norm. Now even the smallest of businesses will require card machines if their main customer base is face to face or customer present.

If you are thinking about a small business card payment machine, here are a few things to consider:

1. How will payments be taken. Face to Face, Online or over the telephone or are you unsure at this stage.
2. The type of card machine you need. It’s not just about what card payment machine you like the look of, but choosing the right features and look for your business.
3. What makes the process easier for your customers, you may want to consider including the contactless feature with your small business payment machine.

Small business card payment machine required? So, which is the best? The answer is there is no best small business payment machine as such, as each small business is different and will have different requirements.

What does your business need a countertop, portable or mobile payment machine?

Some card readers have been developed with small businesses in mind: https://acceptcardpayments.com/card-readers/

There are many factors to be considered for a Small business looking for a card machine. so why not contact ACP today, and see what small business card payment machines we can offer. Click here to get a free quote for your small business card payment machine or simply give us a call on 0333 305 4500.

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There are no additional fees for using the contactless payment card however standard fees and charges may be applied. Designed for the smaller payments with the average being £8.97 in in the third quarter of 2016. Up from £7.12 in the same period in 2015.

It is also claimed that 21% of card payments made were done so using contactless payment technology, this accounted for just over 1 in 5 transactions.

When they first arrived, some people were concerned that they might make multiple payments for the same item. With the contactless payment card, each transaction has to be completed or void before the next one. This system has been put in place as a safeguard.

If you see the symbol below on your card then that means that your card comes with contactless payment technology:

You will know if the retailer is able to accept contactless payments, as they will display the contactless payment symbol below:

Contactless is not set up to be used at a ATM. At an ATM you will need to insert your card and input the pin number in the usual manner and the same applies for cash back. This is also not available on contactless currently. However, the card can be used to make a standard Chip and PIN transaction If you wish to receive cash back. 

How does a contactless payment card work?

Contactless debit and contactless credit cards have a small chip in them, this emits radio waves.

So, to pay for something using this system you hold the card near a payment terminal this will pick up a signal and processes the transaction.

The reader will introduce itself’ to the card, once the card recognises the reader it will then reply with the required coded data.

Contactless cards have a number of security features. These range from a payment limit which is generally around £30 on a single transaction, to a limited number of uses before the customer is asked for their pin.

Safety is important as a card may look like a simple piece of plastic, and uncomplicated, but it holds a great deal more than it appears on the outside. So, we would suggest checking your statements, you should do this on a regular basis, when using contactless don’t feel that you can’t ask for a receipt. People are finding that receipts are not offered when using contactless. Not all merchants will, however they can very easily supply you with one.

Ready to start accepting contactless payments?

Click here and answer a few questions to enable us to find you the best contactless payment provider for your business.

If you prefer you can call us on 0333 305 4500 to discuss further on how we can help you start accepting contactless payments.

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Terminology

Card holder – The person who the card was issued to or an authorized user of the card and is financially responsible for payments made using the card.

Card not Present (CNP) – This is a card payment made where the cardholder is not physically present when the transaction is made. They are not able show the card for a merchant’s visual examination or for then to verify using their pin.

Chargeback – When a customer requests the purchase amount to be returned to their card. There can be many reasons why this may happen. The customer does not receive their goods. The customer does not receive the services. The customer did not place the order. The customer did not make the purchase. This being the case they can then request the issuing bank to charge back the value. The merchant will need to validate the purchase by providing required information.

Chip and Pin – Secure method of undertaking a face to face Transaction. – (see Pin below)

Contactless – Contactless payment systems are devices which use radio-frequency identification for making secure payments.

Credit Card – A payment card, banks earn money through interest charged to the cardholders. There are possibly other fees and if not sure you should check with your provider. Credit card issuing banks have a charge known as interchange.

Debit Card – A payment card that lets buyers pay for goods and services with funds from their account.

E-Commerce – The supply of goods and services conducted electronically over the Internet.

Face to Face (F2F) – Also known as a Customer Present Transactions. – The Cardholder is physically present when the transaction is processed and the card transaction is processed using a Point of Sale Terminal.

Gateway – A payment processing solution that protects cardholder data during the payment process.

Interchange Rate – A fee charged by Visa and MasterCard to complete a transaction.

KYC (Know Your Customer) – KYC is the due diligence that financial institutions and other regulated companies use to identify their clients and ascertain the relevant information required.

Merchant – Merchants are the establishment or person authorized to accept card payments. for goods or the services that they supply.

Merchant Account – This is the type of bank account that allows businesses to accept payments in multiple ways, be this via debit or credit cards and , this account is used for the settlement of payment card transactions.

Merchant Bank – A bank where merchants hold their account(s).

Mail Order Telephone Order (MOTO) – These are cardholder not present transactions where the payments are taken over the phone or in writing.

Payment Card – A general term used for any plastic card be it Credit, Debit or Charge.

Payment Card Industry Data Security Standard (PCI DSS) – This is a standard for organizations to apply by if they handle credit cards from the major card schemes.

Payment Terminal – also known as a point of sale terminal, credit card terminal, or a PDQ terminal – It is the device that interfaces with the payment card to make the transfer. There are various types of terminals available but, most have the same basic purpose and functions.

Mobile Terminals – These terminals use a mobile telephone connection. you can away from a fixed location and still accept card payments, for example, a stall holder, show, exhibition or on the road Merchants can use a mobile terminal, provided that a stable signal is available.

Online Payments – The terminals listed are physical pieces of hardware that are used to accept card transactions These can be used when the merchant is with their customers – or used to key in the card details for a card-not-present transaction.

Portable Terminals – The difference between a portable terminal and a mobile terminal is that it must be used within a specified radius of a base station. The base station must be connected and sited. These terminals are predominantly used within the hospitality industry.

Standalone also known as counter-top – These terminals accept card payments at a fixed location. You will require a power socket and cabled Ethernet connection.

Integrated payment terminals – Simply put: integrated payment terminals are networked.

PDQ – Process Data Quickly.

PIN – A personal identification number commonly used to verify a transaction.

Point of Sale (POS) – This is the time and place when a retail transaction is completed. It is also the point at which a customer makes a payment for goods or services received.

PWCB – Purchase with Cash Back – an optional transaction type that can be offered by a merchant. The merchant can choice to have this feature activated or disabled in the vast majority of cases.

Set Up Fee – Some Acquirers, Processors and ISO providers will charge a one-off fee for the setting up the card processing arrangements.

Terminal – This is the hardware device that captures card payment details and submits these for processing.

Void – A void cancels a transaction.

Are you still confused about card payment terminology? Let ACP do the hard work for you, we offer free impartial advice helping you find the bespoke card payment solution for your business.

Get a free card payment quote or call us on 0333 305 4500.

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This is a summary of UK Payment Markets 2016, which sets out the way consumers and businesses chose to pay in 2015 and forecasts how things will change up until 2025.
Details of how to obtain a full copy of the report are available from paymentsuk.org.uk/industry-information/annual-statistical-publications

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Card ownership and use

As of October 2016, there were a total of 100.1 million contactless cards in issue in the UK. Of these, 31.5 million were credit/charge cards.¹⁴

68.7 million contactless debit cards were in circulation as of October 2016, accounting for 69% of total debit cards in issue and up from 53% the previous year.²

In September 2015, the UK Cards Association increased the cap on tap-and-go contactless payments to £30. This new limit continues to fuel the use of cards.¹

100.1 million debit cards were in circulation in the UK as of October 2016, down from 100.3 million in September 2016, but up from 98.4 million in October 2015.²

The number of contactless debit cards in circulation increased from 74.5 million to 97 million between August 2015 and August 2016.⁴

Borrowing and spending

Annual growth in high street banks’ credit card borrowing was 6.2% in March 2016, exceeding growth in the wider (all issuers) credit card market which grew at an annual rate of 5.7%.⁹

There were 223 million credit card purchases in March 2016, with a total value of £12.6 billion. This spending volume was 2% higher than in March 2015, with an aggregate value 1% lower.⁹

About 60 million credit cards were in issue as of March 2016, relating to 50 million accounts. About 67% of these were active at the end of March (i.e. carrying a balance relating to card spending and extended credit). About 42% of all balances in aggregate incur no interest at all.⁹

Debit card spending

During October 2016 domestic spending on debit amounted to £39.2 billion, a 0.8% increase on the month before. This was the lowest growth rate since May 2016.²

The growth in the number of purchases made on debit in the UK in October 2016 also slowed to a six-month low of 971 million. This subdued growth could be explained, in part, by the high level of uncertainty in the UK’s economic performance following the Brexit vote earlier in 2016, contributing to a fall in consumer confidence.²

The domestic average transaction value (ATV) for debit cards fell by 8p between September and October 2016, to £40.36, the lowest level since May 2003. This measure has declined notably since peaking at £48.69 in June 2010, mainly driven by growing adoption of contactless cards, changing consumer shopping habits coupled with continuing supermarket price wars.²

International ATV, meanwhile, increased for the first time in three months to £27.00. The average monthly spend per card reached the highest level on record, at £428, and the average monthly number of purchases per card also reached a record high at 11.04 during that month.²

In October 2016, each debit card was used to make on average 9.7 payments, while the average monthly spend per card increased by £4 to £392.²

International debit card transactional activity continued to grow at a faster rate than domestic spending, albeit from a much lower base. The number of international purchases rose in October 2016 by 1.9% to reach 133 million compared to 131 million in September 2016 and 122 in October 2015.²

Each debit card was used to make 1.33 international purchases in October 2016, compared with 1.24 in October 2015, while the average spend per card was £35.92, compared to £33.15 in October 2015.²

General card spending

Payment card spending in Q3 2016 amounted to £163 billion generated from a record 3.7 billion transactions. Card spending accounted for 77.1% of national retail sales by the end of Q3 2016. ATV registered a quarter-on-quarter increase for the first time since 2013, driven by foreign-issued credit card activity in Q3 2016.⁶

Payment card spending amounted to £54.7 billion in September 2016, up by 0.6% on August.³

In September 2016, there were 1.3 billion card transactions, 157 million of which were online purchases. Spending online amounted to £12.7 billion.³

Growth in card spending continued to slow down in September 2016 with an annual rate of 4.0% – more than twice lower than September 2015 (8.3%). Slower growth in card spending could be linked to an uptick in the annual consumer price inflation rate to a 22-month high, along with lower consumer confidence after the Brexit vote.³

There was a slight decrease in the average transaction value (ATV) on all payment cards, which fell by 4p to £43.45 in September 2016, well below the level in September 2015 (£45.51).³

Contactless card spending

£2,903.2 million was spent in the UK in November 2016 using a contactless card. This is an increase of 3.6% on the previous month and an increase of 183.5% on the previous year. The value is split between debit (£2,553.9 million) and credit / charge cards (£349.3 million).¹⁴

324.5m contactless transactions were made in November 2016. This is an increase of 3.8% on the previous month and 154.5% over the year. The volume is split between debit (286.1 million) and credit/charge cards (38.5 million).¹⁴

As of November 2016, 439,623 bank-owned terminals are available in the UK where contactless cardholders can make a contactless transaction. This is an increase of 2.3% on the previous month and 44.5% over the year.¹⁴

The average contactless transaction was for £8.95 in November 2016. This is split by £8.93 on a debit card and £9.08 on a credit/charge card.¹⁴

£9.3 billion was spent using contactless between January and June 2016, more than the total 2015 contactless spend of £7.8 billion.¹⁵

Debt

Total credit card debt in November 2016 was £66.7 billion. Per household this is £2,469.⁸

Gross lending averaged £15.3 billion per month in Q3 2016, up from £15.1 billion in Q2 and £14.7 billion the year before. Net lending also increased slightly, averaging £443 million per month, up from £440 million in the previous quarter of 2016 and £361 million the year before.⁶

At the end of Q3 2016 credit card outstandings stood at £65.7 billion, up by £0.6 billion on the previous quarter. Around 43% of this total was non-interest bearing. This total accounted for 4.4% of total personal sector outstandings (£1,503 billion), compared to a peak of around 6%, recorded in 2002.⁶

Total lending to individuals increased by £4.9 billion in October 2016, compared to an average monthly increase of £4.2 billion over the previous six months. The three-month annualised and 12-month growth rates were 3.9% and 4.0% respectively.⁵

Within consumer credit, credit card lending increased by £0.6 billion in October 2016, broadly in line with the average over the previous six months. Other loans and advances increased by £1.0 billion, broadly in line with the average over the previous six months.⁵

As of March 2016, net borrowing through personal loans was rising at an annual rate of over 5%, according to the BBA.⁹

People in the UK owed £1.508 trillion at the end of October 2016. This is up from £1.455 trillion at the end of October 2015 – an extra £1,041.23 per UK adult.⁸

The average total debt per household – including mortgages – was £55,982 in November 2016, up from £55,856 the month before. Per adult in the UK, that is an average debt of £29,930 – around 113.2% of average earnings.⁸

Based on November 2016 trends, the UK’s total interest repayments on personal debt over a 12-month period would have been £50.574 billion. That’s an average of £139 million per day. This means that households in the UK would have paid an average of £1,873 in annual interest repayments. Per person that’s £1,001 – 3.79% of average earnings.⁸

According to the Office for Budget Responsibility’s November 2016 forecast, household debt is predicted to reach £2.294 trillion in Q1 2022.⁸

Outstanding consumer credit lending was £192.19 billion at the end of November 2016. This is up from £178.3 billion at the end of November 2015, and is an increase of £275.54 for every adult in the UK.⁸

Average consumer credit debt per household was £7,118 in November, up from a revised £7,047 in October – and £515.37 extra per household over the year.⁸

Average consumer credit borrowing stood at £3,806 per UK adult in November 2016. This is up from a revised £3,768 in October.⁸

Total credit card debt in November 2016 was £66.7 billion. Per household this is £2,469 – for a credit card bearing the average interest, it would take 25 years and 6 months to repay if you made only the minimum repayment each month.⁸

Total net lending to individuals by UK banks and building societies rose by £5.1 billion in November 2016 – or £170 million a day. Net mortgage lending rose by £3.2 billion in the month; net consumer credit lending rose by £1.9 billion.⁸

Identity theft and fraud

In terms of overall losses, payment card gross fraud showed a slight increase of 1% to £249.9 million in the six months to June 2015, compared with the same period in 2014. However, this period also saw a substantial growth in overall card spending which means card fraud as a proportion of purchases fell to 6.9p for every £100 spent, the lowest level since 2011.¹

Losses on purchases made using a card remotely – online, over the phone or by mail order – stayed flat at £174.4 million in the first half of 2015, but the number of incidents of remote purchase fraud fell by 5% during this period. E-commerce card fraud totalled an estimated £109.9 million, relatively unchanged since 2014.¹

Online card spending increased by 14.3% to £67.4 billion in the first six months of 2015, up from £59.0 billion in the same period of 2014. At the same time, card fraud losses in the UK fell by 4% to £167.5 million, while overseas losses rose by 14% to £82.4 million.¹

Banks successfully prevented £355.4 million of payment card fraud in the first half of 2015.¹

The UK saw Europe’s largest annual jump in card fraud losses for 2015, according to analysts at FICO. Card fraud rose in 10 of the 19 countries studied, with Greece, Denmark, France and Russia posting the highest rises after the UK.⁷

Most of the 18% rise in losses in 2015 came from online transactions, reflecting the growth in this channel, the ease of accessibility to funds and lower risk for criminals and the theft of personal data through cybercrime.⁷

The rise in UK card fraud in 2015 equates to an additional £88.5 million lost. About 75% (£66.7 million) of that increase was in card not present (CNP) fraud, and £42.4 million of CNP fraud came from e-commerce. The UK contributed about 43% of the total card fraud losses across the 19 European countries studied.⁷

Total financial fraud losses across payment cards, remote banking and cheques in the first half of 2016 increased by 25% to £399.5 million, enabled by scams and online attacks. During the same period in 2015, total fraud losses were £320.3 million.¹¹

Banks’ security systems continued to prevent the majority of fraud from taking place in the first half of 2016, with prevented fraud totalling £678.7 million.¹¹

Losses on payment cards – which includes remote purchase fraud, lost and stolen cards, card not received, counterfeit card and card ID theft – stood at £321.5 million in the first half of 2016, compared to £244.6 million in the first half of 2015, an increase of 31%. The prevented loss for cards stood at £475.7 million.¹¹

Remote purchase fraud increased by 31% to £224.1 million between January and June 2016, compared to £171.7 million in the same period of 2015. Intelligence suggests fraudsters are using card details obtained with malware and data breaches, while there are more opportunities to commit such crimes because of the growing number of e-commerce sites.¹¹

There was a slight increase in remote banking losses in the first half of 2016, up from £66.2 million in the first half of 2015, to £70.6 million, with a prevented loss of £103.2 million. Scams continue to drive remote banking fraud, with criminals tricking victims into handing over their money or banking details.¹¹

Fraud on contactless cards remains very low, with £2.8 million of losses over 2015 compared with total spending of £7.75 billion. This represents just 3.6p in every £100 spent on contactless.¹⁰

Online and mobile use

In September 2016, online spending accounted for 23% of total card spending, with the number of e-commerce payments accounting for 13% of the total number of card payments.³

Spending online amounted to £12.7 billion, while the number of online purchases rose to 157 million during September 2016.³

The value of online retail sales grew 18.9% year-on-year (YoY) in October 2016. This was building on a comparatively low rate in October 2015 (when growth was 8.7%), but it still represents the highest YoY growth rate in any month since November 2014, when Black Friday had a huge impact on pre-Christmas shopping patterns.¹²

Growth for online retail sales was at 15.1% from January to September 2016 against the same period in 2015, 37.3% ahead of the original start-of-year forecast of 11%.¹⁷

The total estimated spend on online retail sites on Black Friday 2016 was £1.23 billion – a 12.2% increase on the £1.1 billion spent on the same day in 2015 and almost a quarter lower than the original forecast growth of 16%. An estimated £6.45 billion was spent over the Black Friday peak period (Monday 21 – Monday 28 November 2016).¹⁸

Across mobile channels, tablets made a resurgence in October 2016, with sales completed on the device up 6.0% YoY. In the lead-up to Black Friday, it may be the ease of browsing multiple sites and products on the device that has boosted their use over smartphones which offer smaller display screens.¹²

Bankruptcy

264 people a day are declared insolvent or bankrupt as of November 2016.⁸

There are 2,102 consumer county court judgments (CCJs) issued every day as of November 2016, with an average value of £2,030.⁸

More than 300,000 people in the UK are too poor to go bankrupt because they cannot afford the £525 fee, and 8 million British households have no savings — one of the lowest savings rates in the EU.¹⁶

The number of people who became insolvent in England and Wales was 24,251 in Q3 2016, a 6.0% increase on the previous quarter, and 19.3% higher than the same quarter in 2015. There were 13,917 individual voluntary arrangements (IVAs) in Q3 2016, which was 10.9% higher compared to Q2 2016 and 28.8% higher compared to the same period in 2015.¹⁹

The number of debt relief orders (DROs) decreased on the quarter in Q3 2016, but increased on the year. There were 6,490 DROs, which was a 3.7% decrease compared to Q2, but 15.3% higher when compared to the same period in 2015.¹⁹

There were 3,844 bankruptcy orders in Q3 2016, an increase of 7.0% compared with last quarter, but 1.5% lower than Q3 2015. The number of bankruptcies resulting from debtor applications increased by 12.0% compared with the last quarter, while bankruptcies following a creditor petition fell by 3.7%.¹⁹

The rate of insolvency increased in the 12 months ending Q3 2016, as 1 in 515 adults (0.19% of the adult population) became insolvent.¹⁹

Around 8.8 million people would benefit from debt advice but only one in six seek help.¹⁶

Customer satisfaction

Between 1 April 2015 and 31 March 2016, the Financial Ombudsman answered 1,631,955 enquiries from consumers – over 5,000 each working day. Of these, one in five was taken on for a more detailed investigation – a total of 340,899 new complaints. A total of 438,802 complaints were resolved.¹³

Of the new complaints, 56% were about the sale of payment protection insurance (PPI). Excluding PPI, two-thirds of complaints were resolved within three months.¹³

Complaints about packaged bank accounts more than doubled – while complaints about credit broking fell by more than half.¹³

More than half of the total number of complaints involved four banking groups – while 4,076 financial businesses accounted for just 3% of complaints.¹³

Of the total complaints resolved, 8,200 (3.5%) were about credit cards, a fall of 3% on the previous year, while 460 were about store cards, up 2% from the previous year.¹³

Sources:

1. UK Cards Association Annual Report 2016

2. UK Cards Association Debit Card Report October 2016

3. UK Cards Association Card Expenditure Statistics September 2016

4. UK Cards Association News November 2016

5. Bank of England Money and Credit October 2016

6. The UK Cards Association summary of key statistics for Q3 2016

7. FICO News August 2016

8. The Money Charity Statistics January 2017

9. BBA Monthly Statistics Release March 2016

10. Financial Fraud Action Annual Review 2016

11. Financial Fraud Action News October 2016

12. Cap Gemini report, November 2016

13. Financial Ombudsman Service Annual Review 2015-16

14. The UK Cards Association Contactless Cards Statistics November 2016

15. BBA Report: The Benefits of Banking October 2016

16. Centre for Social Justice report July 2014

17. Cap Gemini Report November 2016

18.  IMRG Report: Black Friday 2016 sales

19. The Insolvency Service: Insolvency Statistics July to September 2016 (Q3 2016)

Updated: 1 March 2017

Source: UK credit and debit card statistics

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