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Online shoppers used payment cards to spend £12.6bn online in June: UKCA

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Shoppers used their payment cards to spend £12.6bn online in June, through 156m purchases, according to new payment data.

The UK Cards Association (UKCA) card expenditure statistics for June 2016 suggests that online spending accounted for 24% of all spending on payment cards, which totalled £53.1bn. While all spending was up by 4.9% in value, online spending rose by 12%. The number of purchases made online grew by 21%, but average transaction values fell from £81.04 last month, and from £86.27 last year, to £80.64 in June 2016.

The analysis detected an overall move from retail sales (+3% on last year) to the service sector (6.7%). But ecommerce payments continued to grow and accounted for 13% of all card payments. Eight per cent of retail sales payments tok place online. Catalogue spending was a “major contributor” to this, said the report: it fell in the mixed business category where 30% of card payments took place online, while 25% of clothing sales took place online.

The growth in overall card payments came, suggests the analysis, as more people have moved from using cash to cards, and especially with the emerging popularity of contactless cards. Some 219m payments took place using contactless in June, and accounted for 18% of total payment card purchases. The number of purchases using contactless rose by 202% at the same time, averaging £8.60 per transaction.

Shoppers made more purchases on debit cards (£37.8bn, +5.6% on last year) than on credit cards (£15.3bn +3.3%).

Commenting on the rise in contactless payments, Scott Underwood, head of solutions at managed IT services provider Niu Solutions, a leading provider of managed IT services, said the data from contactless could be very useful to retailers.

“Last year, we saw contactless cards increase the spend limit per transaction from £20 to £30, making it even more convenient and faster for consumers to pay for their shopping,” he said. “This is not only good news for consumers, who expect varied methods of payments, but for retailers too. The more that customers are encouraged to use electronic payments, the more opportunity retailers will have to collect valuable customer data.

“Electronic payments are not the only way to obtain this information, however. Retailers need to work closely with their IT solutions provider to make sure they have access to the tools and systems they need to collect and analyse customer data from every possible touch-point.

“This data-led approach can also help to combat ‘basket cannibalisation’, which occurs when retailers are unable to track in-store purchases unless a loyalty card is used. In this case, a retailer’s analysis of customer behaviour is based solely on data obtained from other sales channels, which means that vouchers are often sent for products that the customer already purchases anyway.

“By adopting more innovative models of data analysis, retailers can overcome problems like these and gain a much more comprehensive view of their customers, leading to much greater loyalty and satisfaction.”

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