UK Cards And Payments Market - By Cards, Volumes And Historical Trends

Pay now (Debit) cards lead the payment cards market in the UK in terms of transactional volumes, value and number of cards in circulation. The significant factor driving this trend is the initiative from the UK government to increase bank using customer base by offering the basic bank accounts in collaboration with the banking organizations. The growing interest to spend debit cards for small transactional volumes also boosts the use of these cards.

The number of debit cards is estimated to cross 104 million by 2021 from the current value close to 100 million. Many basic bank accounts were opened in the previous years with the aid of prominent banks like Barclays, Lloyds Banking Group, Nationwide, Royal Bank of Scotland, Clydesdale and Yorkshire Bank, Co-operative Bank, HSBC, TSB, and Santander, offering a free charge accounts. More than 4 million basic bank accounts were opened as of January 2017 and the largest number of those accounts were contributed by two major banking firms, Lloyds and Nationwide.

Another noteworthy factor promoting the debit card in the UK is the extended use of contactless cards. The key banks are updating their debit cards to contactless to benefit maximum and some digital-only banks like Starling Bank partnering with MasterCard are also providing contactless debit cards to their customers.

Account switching service launched in September 2013 also provided the customers a choice to switch across their current accounts and participating banks. According to the British Banker’s Association, approximately 2.8 million users have availed this account switch service and more than 85,000 switched their banks accounts by July 2016. This also acted as a catalyst for the increased use of the pay now cards in the United Kingdom.

Visa and MasterCard are the leading debit card providers in the UK, investing heavily in the technology of contactless cards. Visa also supports mobile payments like Apple Pay, Samsung Pay, and Android Pay. Mastercard is also allowing its cardholders access to Samsung Pay since May 2017.

Around 80% of the total debit card market share in the United Kingdom was accounted by the top five leading card issuers, namely, Lloyds, Barclays, HSBC, Santander and Royal Bank of Scotland. These organizations provide special benefits to its customers like maintenance fee waivers, reward points, cash backs, insurance, overdraft and many others attracting more and more people towards card payments.

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