How British card behaviour compares to other countries
By Marianne Curphey
It's natural to wonder how the UK fares compared to the rest of the world, whether it's in cuisine, entertainment or payments. While the first two may be a bit subjective, the latter is easily measured. Here's how the UK shapes up compared to other countries around the world.
Brits love their credit cards and are leading the way in Europe in trialling contactless payments and mobile payment technology, according to the World Class Payments report by Payments UK on how cards are used around the world.
Brits use credit cards far more than the Dutch or Germans, but the boom in the Chinese economy and the rapid rise of the middle classes there mean that per person, we hold far fewer cards than the Chinese.
Still, the report says customers in the UK enjoy a degree of choice and protection in the way they pay that you'd be hard pressed to find anywhere else in the world.
"Even countries like the USA, that you'd expect to be very similar to us, are years behind the UK in some areas," Adrian Buckle, chief economist at Payments UK, stated in the report. "For instance, the USA is still looking to introduce something like Faster Payments, which has enabled almost instantaneous Internet and mobile payments in the UK since 2008, and it is still in the early stages of introducing the global chip-and-PIN technology, which became the norm in the UK back in 2006. With the population of the USA almost five times as large as the UK, the size and complexity of its payments infrastructure can sometimes hinder innovation."
The UK embraces technology
James Jones, head of consumer affairs for Experian, says he's not surprised by the figures.
"We are one of the most advanced consumer societies in terms of credit here in the UK, although China is catching up quite quickly," he says. "There has been a lot of innovation in the UK over the past few years, led by the financial services industry, and this has really pushed up use of cards and contactless technology."
Jane Cox, a money psychologist, agrees the UK has become very progressive and has embraced technology and entrepreneurship.
The UK versus the world: By the numbers
- Debit cards are the most common type of card held across the world. Some countries even use them for identification purposes, according to the Payments UK report.
- In India, debit cards are commonly used because the culture does not promote the use of credit. Debit card holding is gradually rising in India, but credit card holding was unchanged for more than a decade leading up to 2014. However, India remains primarily a cash-based economy.
- In the Netherlands, the total number of debit cards per adult is similar to that of the UK. However, the total amount spent on those debit cards is significantly lower than other European countries, possibly because its e-commerce payment system allows direct transfer from bank accounts, even for online shopping. In the Netherlands and Germany, debit cards are more popular than credit cards because of a reluctance to take on debt.
- Debit card holding in the US is relatively low - below the UK average.
- The US has the greatest number of credit cards per head and worldwide has the highest tolerance for taking on unsecured debt.
- According to the Japan Consumer Credit Association, credit card use in Japan is expanding and more outlets are prepared to accept credit cards in anticipation of the 2020 Olympic Games in Tokyo.
- In the European region, credit cards are much more popular in the UK, Ireland, Turkey and Sweden than in Spain, Germany, France and Italy. The latter four prefer charge cards, which require the balance to be paid off each month and therefore avoid revolving credit.
- Cox notes how big a part culture plays in the way cards are used. "I do a lot of work in Holland where cards are rarely used," she said. "Instead people pay by bank transfer or payment via phone. Likewise, you would think that in South Africa people would use cards for security rather than carrying cash."
A 2015 card fraud report from Payments Industry Intelligence shows the ratio of fraud loss compared with the number of debit and credit cards per country. The chart above shows the 2013 fraud figures for the EU, France, the Netherlands, the UK, Canada and the US.
- The UK has lower levels of fraud thanks to the introduction of chip-and-PIN technology, whereas in the US many merchants still only require cardholders to swipe and sign their cards.
- The card fraud losses are higher in countries where EMV migration is in progress (Canada) or has just started (US).
- EMV implementation and 3D-Secure, combined with strong authentication, have done much to reduce domestic losses from lost and stolen cards in Europe.
- In 2012, the US accounted for 47.3% of the worldwide payment card fraud losses, but generated only 23.5% of the total card volume.
According to the World Payments Report 2015 by Cap Gemini and the Royal Bank of Scotland, non-cash transactions in 2013 were driven by increases in mobile technology, and the growth of card and Internet use.
Published: 10 March 2016
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