Contactless transactions soared to over 726 million in the UK during the month of August, marking an almost 14% rise from the same month the previous year.
The surge highlights the prolonged boom in cashless payments, according to a report from the Financial Times.
Contactless payments hiked to £6.9 billion in August, as per statistics from industry trade body UK finance, increasing from £6 billion in August 2018. The figures included transactions made on cards issued both in Britain and abroad.
Despite the majority of transactions in the UK being made using debit cards, shoppers are growing increasingly reliant on credit cards to make payments.
Contactless cards comprised just below one-third of all credit card payments, and accounted for 46% of transactions made with debit cards, the industry body said.
Director of price comparison website Compare the Market John Crossley said that the use of contactless cards for everyday purchases was becoming more commonplace among consumers.
“Contactless debit cards have been the norm for a while, and now an ever-increasing number of people are tapping through transactions on their credit card,” Crossley said.
“Today’s data [suggest] people are increasingly using this type of finance to manage everyday living costs,” he added. Statistics on spending revealed the annual growth rate in outstanding balances on UK credit cards climbed 3.6% – extending the downward trend since its peak at 8.3% towards the beginning of last year.
Consumers were “managing their finances effectively overall,” said UK Finance. Due to 0% credit cards becoming increasingly popular, interest is being charged on just over half of all outstanding credit card balances.
Mr Crossley warned shoppers however, to be adopt a more cautious attitude towards their spending, especially with Black Friday sales and the festive season approaching.
“Providing consumers engage responsibly with debt and keep an eye on outgoings, using a credit card with a 0 per cent APR offer can be a useful way to spread costs,” he said, adding that some deals are only short-term, before a much higher interest rate is implemented.
