UK debit card market dominated by Lloyds TSB

Press Release   •   Feb 04, 2013 10:04 GMT

There was a strong increase in UK debit card transaction activity in 2011, reflecting growth in the number of cards in issue together with a continued migration from other payment methods. The proportion of high street sales (including automotive fuels) made on debit cards grew by three percentage points, for the second consecutive year, to reach 48%.

Coupled with this, the debit card share of total online card spending, which amounted to £63 billion, increased by one percentage point in 2011 to 49%.

Debit cards are the most popular non-cash payment method in the UK. They allow cardholders to pay for goods and services easily and conveniently, and provide a secure alternative to cash and cheques.

Today, most consumers pay for many of their purchases with a plastic card and most retailers take plastic, as do an increasing number of professional service providers. The majority of purchases on the internet are made using plastic cards.

UK residents used Visa cards for £1 in every £4 spent last year after strong growth in e-commerce and the use of debit cards, according to the card processor. Transactions carried out with Visa debit cards rose 45 per cent to £251 billion in Britain.

In 2011, Lloyds TSB confirmed its leadership of the United Kingdom debit cards market, with a share of 18% in terms of cards in circulation and in terms of value of transactions. The bank benefits from being the leading provider of current accounts in the UK.

The bank is closely followed by Royal Bank of Scotland, which ranked second with a value share of 16% of transaction values, Barclays (14%) and HSBC (13%).

Debit cards showed a 4% growth in volume from 2011 to reach more than 89 million cards in 2012. While debit card use saw some benefit from consumers reducing their use of credit cards, the rapid fall in cheque transactions led to greater migration to debit card use. Cheque transactions reported double-digit decline, in value terms, with cheques declining by 21% in 2012 alone.

The UK Payment Council had the target of closing the UK cheque clearing system by October 2018; however this date has been postponed indefinitely and cheques are expected to remain around as long as customers need them. However, volume and value transactions are expected to decline further, to the benefit of debit cards.

For more information on the UK debit card market, see the latest research: UK Debit Card Market

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