News

Cash and card use remain strong by U.K. cardholders at ATMs and POS

June 7, 2009

LONDON — Recent research conducted by the U.K. Cards Association shows that 317 million overseas transactions were conducted with cards issued in the United Kingdom — totaling just more than 3 percent of all transactions on U.K. cards.

According to a news release, in 2008, Britons used their plastic for Â£27.8 billion in overseas transactions — Â£19.9 billion on credit and debit card purchases and Â£7.9 billion on cash taken out of cash machines. This was up just more than 10 percent from the total in 2007.

The value of these overseas transactions for 2008 breaks down into Â£15.1 billion on credit/charge cards, Â£12.4 billion on debit cards and Â£0.3 billion on ATM-only cards.

Fraud abroad on U.K.-issued cards totaled Â£230.1 million in 2008 — an increase of 11 percent from 2007, when it totaled Â£207.6 million. In-country, the use of debit and ATM cards also was strong in 2008. According to the association, 71 percent of all cash acquired by U.K. consumers came from ATMs, and 2.9 billion ATM cash withdrawals were made last year — equal to 91 withdrawals per second.

Cash-payment volumes are expected to fall 27 percent over the next 10 years, and if current trends persist, 2010 will mark the first time debit-card spending overtakes cash spending, based on value of the total transactions.

That written, the number of ATM withdrawals continues to rise and is forecast to peak in 2011. Consumers are increasingly using ATMs for withdrawing cash, where previously they would have withdrawn money in bank branches or at post offices; five years ago only 54 percent of cash came from ATMs. Last year, 71 percent of cash was acquired that way. This shift has been driven by an increase in the availability and number of ATMs in the U.K., as well as the migration of payment for state benefits and pensions to automated methods.

U.K. ATMs paid out Â£192 billion in 2.9 billion transactions in 2008. By contrast, in 2008, debit cardholders made 5.5 billion purchases and spent Â£247 billion on their cards.

"It comes as no surprise that ATMs are the primary port of call for cash withdrawals," said Martin Macmillan of Level Four, an ATM software company based in the U.K. "Despite the popularity of this channel, however, ATMs continue to suffer significant levels of downtime. This is damaging both for a bank's brand and their customer service."

Macmillan says banks are aware of the need for uptime, as many have named it a top priority within the last two years.

"A key reason for ATM downtime is inadequate testing," he said.