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UK = indicator for payment system developments globally?

The UK has, in many ways, been a test bed for new payment systems and solutions globally: it was one of the leading drivers of the development of the SWIFT cross-border messaging and payment system; installed one of the first real-time clearing system CHAPS; first major country to introduce a Faster Payments system; and has been using all kinds of card technologies to improve payments at the point of sale.

The latest statistics and reports on the UK clearing systems and from other bodies give a clear indication of what is happening to payments system development and usage globally.

UK payment statistics July 2018

The July report on the clearings in UK given below:

Source & Copyright©2018 - Payment Systems Operators

Showed that:

  • Faster Payments single immediate payments are now over 50% of the direct credit processed by BACS and are still growiing at 20%+/annum
  • Faster Payments forward dated payments are also growing at 31%/annum
  • BACS direct debits are by far the largest payment system and are still growing at 3%/annum
  • Credit and cheque clearing is declining rapidly at 11%+/annum.

Payment systems at point of sale in UK

The British Retail Consortium’s payment survey on payments at retailers in the UK in 2016 showed that:

  • For the first time, more than half of retail purchases were made by card
  • For the first time, debit cards have overtaken cash purchases
  • Falling average transaction values (ATV) of card payments, both in debit and credit cards, shows that cards are increasingly displacing cash for lower value payments.
  • Retail customers have become less reliant on credit cards with consumers borrowing less for day-to-day purchases in contrast to a broader trend of increasing consumer borrowing in the UK.

Global lessons

The global lessons from these statistics are that:

  • Cash has a declining but still a central role in payments at the point of sale 
  • Debit cards, particularly with contactless functionality, will have an increasing role in point of sale payments replacing cash
  • Credit cards will have a central role in making large purchases, but their role in day-to-day expenditure is declining
  • Instant payment systems, such as Faster Payments, will have an increasing role in online payments and for SME B2B payments
  • High value payment systems such as CHAPS will take a declining share of the local economy’s payments.

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This item appears in the following sections:
Payments - Receipts
Payments - Receipts at POS
Card Payments at POS
Cash Payments at POS
Cheque Payments at POS
Collecting Payments on the Internet
Collecting Payments via Mobile
Payments - Disbursements

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