Total spending on Visa cards in the UK has surpassed £600bn for the first time reports Visa Europe, which today announces its annual results for the year ending 30 September 2014.
Annual point-of-sale spend on Visa cards in the UK grew 9.2% during the year to reach £486bn, while the volume of point-of-sale transactions rose 9.9% to 10.6bn. A total of 130m Visa cards are now in circulation in the UK, responsible for more than £1 in every £3 of consumer spending. Average transaction values also continued to fall as UK consumers increasingly adopted cards for smaller purchases.
The results provide strong evidence of the UK’s transition to a digital payments economy and a sign of the most exciting period for payments since the invention of the debit card. 2014 saw a string of digital payment firsts:
- Contactless went mainstream. A quarter of people now have a contactless card, 160m transactions happen a year and several supermarkets introduced the technology
- £614m was spent on Black Friday on the UK’s busiest ever online shopping day while total e-commerce spending increased 16.8% across the year
- Contactless was introduced on the London Underground and Overground and sponsored a charitable giving initiative, Penny for London, using the technology
- Visa launched its Card Linked Offers service, providing quick, tailored cashback rewards to shoppers, based on their shopping habits and preferences
2015 will continue this trend with digital payments milestones including further contactless adoption; the rollout of V.Me by Visa in the UK; an increase in the contactless spend limit to £30; growing options for mobile payment; continued growth in m-commerce; and greater investment by banks, telecoms companies, payment providers and start-ups in new ways to pay.
Kevin Jenkins, managing director UK and Ireland at Visa Europe, said: “Digital payments have come of age. There has been an explosion of new payment technologies, ideas and players that was previously unimaginable. Mobile has changed everything and 2015 will see this trend writ large.
“Consumers are now thinking digital rather than cash first and our results, with new highs on transaction volumes and spends, reflect this. Online, contactless and mobile are the ways people want to pay now and that is why the pace of investment is occurring in payments today.
“It’s an exciting time but history suggests that innovation comes with risk. We need to avoid a ‘Wild West’ scenario on payments by balancing this new convenience with security for the consumer every time they use a new app, website, card or mobile technology to pay. That is where our role as an enabler and partner to innovators can ensure this is the case.
“We should not ignore the role of the new Payment Systems Regulator in driving digital payments too. Ensuring that innovation and competition responds to the payments needs of users first and foremost should be a priority for them.”
Across Europe as a whole, results for the year show there are now more than 500m Visa cards in circulation, one for every adult in Europe, more than 100 million of which are contactless. Visa now accounts for €1 in every €6 spent in Europe and the amount spent at the point-of-sale has broken through €1.5 trillion (€1,500 billion), a rise of 9.4% since 2013, with 37 billion transactions. The total amount accessed through Visa cards, including ATM transactions, now stands at over €2 trillion. E-commerce grew by 17% in the year to more than €280bn.
Nicolas Huss, Chief Executive Officer of Visa Europe, said: “This is an incredibly exciting time for payments, and 2015 promises to be a year full of opportunities. We will further eat away at the 70% of transactions that are still settled in cash in Europe. We will make use of the abundance of digital technology that now surrounds us to enable new digital payment solutions. And, most importantly, we will deliver an even better quality of service to retailers and consumers alike by making payment simpler, smarter and more secure than ever before.
“We build this vision on a strong base. Our 2014 results show our strongest financial performance to-date with gross revenues growing 9% year-on-year. This enables us to deliver exceptional value to our members – banks and payment providers across Europe – as our shareholders and customers. The results also demonstrate that we have the brand, scale, ubiquity, reliability and security to attract the very best partners to work with us on transforming how people pay and be paid.
“Our partnership with retailers is critical and it’s time to move on from the debate about fees and onto something more constructive. Regulation is coming on interchange fees and the European Commission estimates that this regulation will bring savings of around €6bn to European retailers. At Visa Europe, we’re investing more than €200m a year in new payments technologies. If retailers invest just a fraction of their savings, we can truly work together to make a leap forward in improving the consumer experience.”