Card Payments – A Way Of Life

Contactless, online, over the counter; no matter how we use them it is clear that credit and debit cards have become part of our way of life.  So much so that according to the UK Cards Association, in April 2016 the number of debit cards in circulation topped one hundred million for the first time.

Add in the fifty-nine million credit cards also in use in the UK and it is hardly surprising that we are seeing a rise in comments about the approach of a cashless society.   This move has been hastened by the advent of contactless cards which in April 2016 alone accounted for 188 million transactions, equating to £1.58 billion.

With contactless cards being used for smaller transactions, that still represents only a fraction of the £53 billion which was spent on cards in April; although in terms of number of transactions, contactless payments accounted for 16% of the overall total. With record numbers of cards in issue and spending patterns moving firmly towards card payments, perhaps it is fitting that June 2016 saw the fiftieth anniversary of the inception of the credit card.

Major benefits of credit and debit cards as a means of payment include convenience, speed of payment and wide acceptance. But they are not the only method of payment to have undergone a revolution. The rise in online and ‘on your phone’ banking allied to payment portals such as PayPal has meant that even when cards are not used, online payments can still be made in a quick and efficient manner.

With all this convenience and speed, perhaps what is surprising is that the humble cheque is still clinging on as a method of payment. Why would a business issue an invoice, post it out, wait for the cheque to be returned by the customer and then wait for several days while it is banked and cleared when an online or debit card payment can be made in seconds? It just doesn’t make sense, particularly with the speed at which banks are closing branches, leaving businesses the choice of entrusting their banking to the post or driving what could be a substantial distance to the nearest bank branch.

Go back a decade or two and the claim could reasonably be made that, particularly when dealing with elderly customers, there was still a level of mistrust of card payments and therefore the cheque was seen as a familiar and secure alternative. That is far from the case today with cheque books, if they are in existence at all, languishing in a drawer and cards being mostly carried in pockets, purses and wallets.

This gives businesses a tremendous opportunity to cut down on administration and speed up the receipt of payments. For example, health practices such as physiotherapists and osteopaths by their very nature need to maximise patient contact time and minimise the time spent on unnecessary paperwork. Taking payments by card before the patient has left the practice at the end of their treatment not only saves time but also keep the cash flow current.

More importantly, health practices aren’t simply confined to collecting payments at time of the appointment. Taking credit or debit card details at the time of booking not only brings payment surety, should patients fail to turn up their appointment a ‘no-show fee’ can be taken in accordance with publicised terms and conditions. Interestingly, the simple act of taking payment details up front helps to concentrate the appointment in the patient’s mind, and therefore reduces the risk of missed appointments.

We may not all be fans of technology but it is hard to ignore the technological breakthroughs which bring convenience and certainty in areas such as card payments. As the Head of Policy at the UK Cards Association, Richard Koch, commented “Since they were first launched in the UK in June 1987, debit cards have become a prime feature in the nation’s wallets.”