The year-on-year figures for the summer month of July’s debit and credit cards spending were released by the Barclaycard Spending Index and show an upward trend of 9.9%.

Although an indication of the use of plastic in July, the Barclaycard Spending Index does not take into account cash payments, nor does it adjust for price increases/decreases. It reflects only the value of debit and credit card spending that is processed through the Barclaycard clearing system.

The figures lead Barclaycard to the conclusion that the traditional sales and retailer discounts offered in the summer months have boosted consumer spending, which challenges much of the opinions that confidence in the consumer market has slipped.

Looking at the figures also reveals that the year-on-year returns have shown a steady increase since the start of 2010 and that July is the third month this year that the figures have increased by plus 9%.

Head of Barclaycard UK Payment Acceptance, Stuart Neal, said:
“If consumer confidence is taking a hit, it’s not happening on the high street. If spending remains at this level compared to last year, 2010 could prove overall to be a very good year for retailers.”

But although the year-on-year figures look strong, the July to June 2010 figures only show a slight increase of a touch under 2%. Barclaycard say that this might be down to consumers taking advantage of earlier sales in June as some retailers rushed out discounted items.

As to the Barclaycard Spending Index itself, it is based on spending by all debit and credit cards across 44 retail sectors. And the retailers analysed are those that use Barclaycard Payment Acceptance to process their transactions.

In all, the organisation accounts for 30% of the market, processing debit and credit card payments for 85,000 businesses in the UK.

Guest Article by Neil Camp

And this is the first decrease since 2006.

The figures come from The UK Cards Association, which represents UK credit card and debit card providers, and they also revealed that the skimming and cloning of cards also fell by a huge 50%. And cheque fraud took a similar dive downwards, dropping nearly 30% from just over £41 million to a touch under £30 million.

The bad news in an otherwise good result is that online banking losses, those committed online, rose by 14% to nearly £60 million.

Online fraud is growing because of people’s vulnerability at their end of the operation (personal computers are still prone to malware attacks), whereas the financial institutions themselves are far more difficult to penetrate due to their sophisticated system protections. Also, individuals are still prone phishing attacks and these tactics (bogus emails promising money, or spurious deals) are on the increase, up 16% to 51,000 recorded incidents.

Melanie Johnson, Chair of The UK Cards Association, said:
“The cards industry sees fighting fraud as a key part of keeping its customers’ interests centre-stage. We are committed to a wide range of measures to ensure customers feel confident, safe and secure when they use their credit and debit cards – whether in a shop, abroad, online, at a cash machine or anywhere else.

“And a fall in card fraud is good news for everyone – UK consumers, retailers and the industry. We recognise that cards will always be targeted by criminals, so we are determined not only to continue to prevent, detect and deter those who are behind this type of crime, but also to make sure that innocent victims don’t lose out.”

The Fraud Control Steering Group, which is the payment industry’s leading fraud prevention group, chipped in with its own comment. David Cooper, Chairman, said:
“Although online banking fraud losses have shown a year-on-year increase, card fraud remains a main focus of criminal activity. However, the industry remains committed to containing and reducing all areas of fraud. To this end, we will continue our partnership approach – working with law enforcement, retailers, consumers and the Home Office – to tackle fraud head-on.”

The levels of fraud are coming down for a number of reasons says The UK Cards Association, including such initiatives as chip and PIN; growth in the use of MasterCard’s SecureCode and Verified by Visa (adds an extra layer of security when online shopping); progress made by the Dedicated Cheque and Plastic Crime Unit (DCPCU), which is the industry-sponsored special police unit; and, the use of more sophisticated anti-fraud techniques by financial institutions and retailers alike.

And for those who were wondering how much such financial fraud accounts in the overall estimate of nefarious activities, then it’s a sobering thought that its only around 2%.

The aptly named National Fraud Authority recently announced that if you combined all the various fraud perpetrated in the UK in a year, it comes to a eye-watering £30 billion.

Guest Article by Neil Camp

Barclay Payment Acceptance, which is one of the largest processors of credit and debit card transactions, said that UK shoppers spent more using their plastic than they did last time. The figures compare 19th December to 31st December, 2009, to the same period in 2008.

And the busiest day turns out to be the 23rd December, when a whopping £497 million was spent using credit and debit cards. Further examination of the data might show of course that this was men doing their last minute shopping.

The next busiest day was 29th December when no doubt attention turned to sale bargains. On this day some £376 million was passed through the tills using plastic.

The total turnover for the period under review was a quite staggering £4 billion, not bad considering the country is still officially in recession. It was a 2.4% increase over 2008 which saw just shy of four billion being spent.

Breaking the data even further, reveals that spending after Christmas was also up from 2008, with £1.68 billion compared to £1.64 billion.

On Christmas Day itself (thought that was a holiday), there were 700,000 transactions totalling £24 million. These appeared to peak at 12.08pm (maybe in readiness for lunch and the Queen’s Speech), with 32 transactions a second. The online retailers accounted for £9.5 million’s worth of trades on the day itself, compared to £8.1 million in 2008 (up 17%).

On boxing day, many of the transactions, which averaged around £73, were driven by the DIY sector.

Head of Sales at Barclaycard Global Payment Acceptance, Marc Pettican, said:
“Our retailers have seen an increase in turnover compared to the same period last year with over £4 billion being spent. We’ve also seen a stronger post-Christmas performance as shoppers take advantage of the sales discounts and consider the effects of the imminent VAT increase.”

Guest Article by Neil Camp

So says payments association ‘Apacs’ which reported that the total spent on plastic in the first quarter of 2009 was £94.2 billion, up a total of 5.4%. And the number of purchases was £1.9 billion, up 6.5%. Debit cards were responsible for 74.5% of all plastic card purchases in the first quarter of 2009, up 4% compared to first quarter 2008. In the same period, purchases by credit cards dropped 3%.

The use of cheques fell again, with the number clearing through the system down by just over 10% and their total value falling by 9.4%.

Apacs also reported that automated cash machines (ATM) were doing a roaring trade, with £45 million being withdrawn in the first quarter.

Those financial institutions and individuals using The Faster Payments Service continues to gain in popularity, with the first quarter of 2009 seeing a tad over 60 million payments processed. These payments totalled up to a respectable £20.6 billion.

Since the launch of The Faster Payment System in May 2008, which is designed to speed the processing of money between financial institutions, over £50 billion of payments have been processing, representing 142.9 million payments.

Guest Article by Neil Camp