According to a new study of spending patterns in Ireland, consumers continue to choose debit cards over credit cards. 

The use of cards for low-value payments has spiked, with consumers shifting towards the contactless trend as more people discover its efficiency. With regards to big-value products however, shoppers still turn towards their credit cards, the study found. 

A drop in credit card spending was recorded over the summer months. During the same period, debit card spending increased, a sign that consumers opted to use their own funds rather than adding to the money they already owe. 

According to figures based on transaction data published by payment services company New Payment Innovation, credit card spending in Ireland has declined by 2% compared to the same time the previous year. Credit cards comprise 35% of all card payments. 

During the same period, debit card spending climbed 2%, hinting that Irish shoppers became warier of their spending habits and opted to avoid accumulation of debt. 

Debit cards accounted for the majority (64%) of all card transactions, signalling that more Irish consumers are turning towards their debit cards to make purchases. 

The use of cards to purchase small-ticket items surged, New Payment Innovation’s research revealed, as cash among consumers continued to decline in popularity. 

The increased use of contactless and mobile payments reflects the demise of cash and cash payments among customers. 
The average transaction value of purchases made via card fell to €54.27, from €60.82. 

The new research is in line with patterns previously recognised by the Banking & Payments Federation Ireland (BPFI) which indicated, earlier in 2019, that consumers were broadly shifting towards contactless methods of payment. 

Last year, one million contactless transactions were recorded per day. The value and amount of these transactions continued to accelerate by almost 60% as the year progressed. 

With regards to more expensive items, credit cards remained the dominant method of payment, despite the popularity of the contactless trend, said New Payment Innovation. Credit cards were the preferred option for big-ticket items with an average transaction value of €89.97 over the summer months, compared to debit card payments which was less than half at €44.36. 

Managing director of New Payment Innovation Ireland Carl Churchill said that consumers are growing more perceptive and cautious when it comes to their spending habits: “A decline in credit card spending is not just linked to a rainy summer this season. The potential impact of Brexit on the Irish economy seems to be one of the major concerns of consumers.

“With a subsequent shift in the user behaviour towards being more cautious about their spending habits, their conscious effort to reduce their household debt will also lead to a drop-in credit card spends. Average transaction values are also on the decline which demonstrates the increased popularity of contactless cards with further drives an increase in debit card spending instead of cash for low-value transactions.”