Payment technology: 10 years on from Chip and PIN

As Handepay are celebrating their tenth year of saving businesses money, we are taking a look back at how paying by card has changed over the past decade.

Over the past ten years, UK consumers have changed the way they pay for goods. Paying by card now accounts for 78.5% of all retail purchases, a huge increase from just 55% back in 2006. The fact that cashless payments have recently overtaken notes and coins recently hit the headlines, with the BBC reporting a further 30% fall in cash payments expected over the next ten years!

As more independent businesses have adopted card payment technology over the years, it has become quicker and easier for consumers to make payments, encouraging them to carry less cash and pay for smaller purchases when paying by card. Credit and debit card circulation rose to 159 million in 2014, meaning that the average UK citizen holds 2.5 credit or debit cards.

The total amount spent on cards has nearly doubled over the past decade, as figures showed that UK consumers spent £316 billion on cards in 2006, increasing to £622 billion in 2015. One of the reasons for this huge increase is the adoption of new technology, such as Chip and PIN and contactless, making paying by card faster than using cash and allowing business owners to reduce the amount of queuing time. This benefit has led to an increase in the amount of independent businesses deciding to accept card payments of a massive 43% since 2006.

Since the introduction of Chip and PIN to replace magnetic swipe cards in 2006, losses due to counterfeit card usage reduced by over £80 million. Meanwhile, losses due to lost or stolen cards has also reduced by almost half, to £59.7 million per year.

The introduction of “tap and go” contactless payments in 2008 once again changed how UK consumers chose to pay for smaller purchases. Contactless transactions now account for one in ten payments, showing a large uptake in the eight years since its release.

In January 2015, contactless spend in the UK totalled £287 million, rising rapidly throughout the year to reach £1.02 billion in November 2015 alone. The number of contactless transactions carried out by consumers in Europe passed the one billion mark in 2015. More recently, contactless mobile payment technologies, such as Apple Pay and Android Pay, have given consumers more choice in the way they want to pay. According to a report, 40% of consumers with an Apple device have adopted the Apple Pay service since its launch in July 2015.

It is predicted that over the next ten years, consumers will continue to favour paying by card to cash. Last year, nearly half of all payments were made in cash, however it is predicted that debit cards alone will overtake cash as the most frequently-used method of payment in just five years.

Financial disclaimer:

Terminal hire contracts are provided by Merchant Rentals Limited, who is authorised and regulated in the UK by the Financial Conduct Authority (FCA) for Consumer Hire under FRN 720500. Terminal hire can be for consumer hire and non-regulated hire contracts. Please check your contract carefully for details. Regulation of all consumer hire fall under the control of the FCA.

Handepay Ltd is authorised and regulated by the FCA for Consumer Credit under FRN 673564. Handepay is a credit broker for consumer hire not a lender.

Handepay acts as an introducer of card acquiring services on behalf of EVO Payments UK, the card acquiring service provider. EVO Payments UK is the trading name of EVO Payments UK Ltd, a payment institution that is authorised and regulated by the Financial Conduct Authority (FRN number 959332).

Existing Cards Businesses- The one-month rolling terminal hire contract from Merchant Rentals is only available to businesses that are switching from their current acquirer to EVO Payments UK arranged through Handepay.

New to Cards Businesses- The 12-month terminal hire contract from Merchant Rentals is only available to businesses that are new to card payments and wish to receive acquiring services from EVO Payments UK, arranged through Handepay.

The Next Day Banking Settlement service provided by EVO Payments UK incurs an additional fee of £4 a month on top of your acquiring service charges and fees. Provided your card machine performs a reconciliation before 12am (midnight), you’ll receive settlement of funds the next banking day.

Editorial disclaimer:

The information we provide does not constitute financial advice and might not apply to your business. Always carry out research into your business’ needs when choosing a new merchant services provider.

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All of the information contained on this website, including fees, services and functionality, are correct at time of publishing. E&OE.