Recent statistics from UK Finance has highlighted that card transactions in the UK have seen a slight year-on-year increase, signifying the changing role of cash in society.
All cardholders living in the UK have contributed to some 2.13bn debit and credit card transactions this August, which is a 3% increase from the same period last year. This has accumulated a total spend of £74.2bn, which is 1.9% higher than August 2022 – a significant boost for the UK economy.
Contactless payments in particular accounted for 76% of debit and 64% of credit card transactions – for a total of 1.6 billion contactless transitions in August and a 4.8% year-on-year increase.
Split into two, contactless credit card transactions were 7.5% higher than August 2022, while contactless debit card transactions were 4.4% more.
For some financial experts, these numbers and the gradual shift away from cash represent an opportunity to drive the mass adoption of new technologies in the UK that will bring more convenience in payments such as Open Banking.
James Hickman, CCO of Ecospend, told Payment Expert that this shift away from cash has provided merchants and payment services with “significant benefits” when it pertains to embracing Open Banking and other payment innovations.
He said: “Data released by UK Finance today showed that total UK card spending increased 1.9% between August 2022 and August 2023, as consumers and businesses continue to trade cash for card spending.
“The natural next step in this evolution is Open Banking payments, the use of which grew by 102.4% between July 2022 and July 2023.
“Open Banking payments have gradually increased since PSD2 came into force in 2016. However, businesses are now discovering the significant benefits of Open Banking payments on a much broader scale, driving the explosive growth we are seeing today.
”Open Banking can not only streamline the payment process from the customer’s point of view, enhancing conversion rates and customer retention considerably, but it also lowers costs for merchants through increased efficiency.
“While card spending is still on the rise, Open Banking will undoubtedly start to take up an ever greater share of the payments market, a trend that will be interesting to see reflected in card spending numbers over time.”