Card transactions fell in October amid strict COVID-19 restrictions

Saleha Riaz
·3 min read
UK Finance revealed there were 1.7 billion debit and credit card transactions in the UK in October, a 0.4% decline from September and 3.6% lower than in October 2019. Photo: Getty Images
UK Finance revealed there were 1.7 billion debit and credit card transactions in the UK in October, a 0.4% decline from September and 3.6% lower than in October 2019. Photo: Getty Images

Contactless card transactions fell nearly 10% in October 2020 compared to the same time last year, while debit and credit card transactions fell 3.4%, as strict COVID-19 measures meant there were fewer opportunities for people to spend money in pubs, restaurants and on public transport.

However, overall the total value of transactions saw an increase year-on-year.

Research by UK Finance revealed there were 1.7 billion debit and credit card transactions in the UK in October, a 0.4% decline from September and 3.6% lower than in October 2019.

These transactions amounted to a total spend of £64.2bn ($87bn), which was 2.5% less than the previous month but a 4.9% increase when compared to October 2019.

More than four in 10 (41%) card transactions were contactless in October, compared to 44% the same month the previous year.

There was a total of 687 million contactless card transactions in October, 1.9% lower than in September and 9.8% lower than October 2019.

But the total value of contactless transactions, at £8.1bn, was 15.8% higher than October 2019 as people had the opportunity to take advantage of the increased £45 payment limit.

READ MORE: 'Over a third' of UK consumers blocked from paying with cash during pandemic

Meanwhile, the number of transactions made by UK debit cardholders fell 4.6% compared to the previous month to 1.6 billion, which was also 3.5% lower than October 2019.

The total spend of £53.2bn was 9.1% lower than in September and 0.2% less than the same month in 2019.

UK Finance data also shows that outstanding balances on credit card accounts fell by 14.7% in the year to October 2020.

“This is the eighth successive month in which repayments have outstripped borrowing, and the largest drop over a twelve-month period since the pandemic began,” the report noted.

This could be attributed to people choosing to pay off debt or reduced usage of credit, and the reduction of large expenditure on items such as holidays due to continued travel restrictions.

The news comes amid a decline in cash transactions.

In November, a report said cash transactions were expected to rapidly decline in the UK, with Accenture (ACN) predicting 11.6 billion transactions, worth up to £155bn, would shift from cash to cards and digital payments by 2023.

Earlier on Tuesday, Consumer group Which? said that some 34% of consumers in the UK have been blocked from paying for goods with cash during the coronavirus pandemic.

The research showed that people were most likely to have been refused the option of paying with cash when shopping for groceries, accounting for more than a quarter (28%) of incidents.

Watch: Should I save money or pay off debt during the coronavirus crisis?