The frequency of credit card usage in the UK increased at a CAGR of 9.4% during 2012-2014 and the frequency of transaction is expected to reach up to 61 times by 2020.
According to the P&S Market Research “UK Cards and Payments Market – Size, Share, Development, Growth and Forecast to 2020” report, the total number of cards in circulation reached 160.4 million by the end of 2014, representing a penetration of 2.5 cards per person in 2014.
The high penetration in the country is due to the culture of holding multiple cards and card issuer aggressive marketing strategies deployed in the country.
The UK’s GDP per capita increased during the period 2012-2014, from GBP 25,986.1 in 2012 to GBP 27,778.1 in 2014. The GDP per capita is likely to increase further over the period 2015-2020, to reach GBP 34,090.6 in 2020.
This increase is expected to increase the cards usage over the forecast period.
Also, the UK’s population grew steadily from 63.7 million in 2012 to 64.5 million in 2014, and is expected to reach 67.1 million by 2020. This increase in population is expected to encourage card spending over the forecast period.
There was intense competition among credit card issuers to encourage card usage and spend. Credit card issuing banks implement various marketing strateges and offered numerous offers and campaigns to attract consumers. The average charge card transaction value in UK declined from GBP 100.1 in 2012 to GBP 90.9 in 2014, at a CAGR of -4.7%.
The average transaction value is anticipated to decline at a CAGR of -2.1% during the period 2015-2020.
In March 2016, Google announced the launch of android mobile payment service Android Pay in UK. Android Pay will allow smartphone users to take advantage of payment apps provided by banks, credit card providers and retailers to either buy goods in stores or using retailer websites.
The service will support MasterCard and Visa as well as many of the UK’s banks, such as Bank of Scotland, First Direct,HSBC, Lloyds and Nationwide.
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