United Kingdom (UK) Credit Card Transactions Market Overview, 2029

Bank-issued revolving credit accounts have grown in popularity, thanks to the addition of appealing features such as incentive programs, cashback offers, and travel insurance. These solutions cater to a wide range of consumer preferences, increasing the popularity of credit-based transactions. However, recent years have witnessed a significant shift in payment methods, with the increased acceptance of contactless payments enabled by Near Field Communication (NFC) technology and mobile wallet platforms. This trend represents changing consumer behaviours and preferences, transforming the landscape of financial transactions and influencing the credit market. Within the cultural environment, Britons have demonstrated an increasing comfort level with credit cards, as seen by figures showing that around 64% of adults own at least one credit card. This growing acceptance reflects a trend toward adopting credit-based financial products as essential components of ordinary monetary transactions. Concurrently, current statistics indicate a major shift toward contactless payments, which outnumber traditional chip and pin transactions in terms of usage. This change reflects a broader social preference for smooth, efficient payment options, fueled by technological improvements and shifting consumer patterns.

According to the research report “United Kingdom Credit Card Transaction Market Overview, 2029," published by Bonafide Research, the United Kingdom Credit Card Transaction market is projected to add more than USD 150 Billion from 2024 to 2029. Several main factors contribute to the widespread use of credit cards, including the importance of convenience, improved security measures when compared to traditional cash transactions, and the attractiveness of credit account incentive schemes. These factors all contribute to the continued expansion and adoption of credit cards among consumers. Despite the positive elements, problems exist in the form of rising interest rates and concerns about future consumer debt crises. These difficulties highlight the necessity of good financial management practices and regulatory control in reducing the negative impacts of credit card usage. The credit card market operates within a regulatory framework governed by the Financial Conduct Authority (FCA), which is responsible for maintaining consumer fairness and promoting market integrity. Regulatory mechanisms are in place to address concerns about reckless lending practices, with the goal of protecting consumer interests and ensuring financial stability. These laws have a significant impact on defining industry behaviour and increasing customer confidence in the loan market. The landscape is occupied by both established players and inventive entrants. However, the development of fintech disruptors such as Revolut and Monzo injects dynamism into the market by providing innovative credit card solutions that are agile and customer-centric. This combination of established incumbents and agile challengers generates a competitive climate that promotes innovation and value creation for consumers.

The credit card market encompasses various card types tailored to different consumer needs. General purpose credit cards, such as Visa, Mastercard, American Express, and Discover, offer versatility for a wide range of purchases and transactions, both online and in-person. These cards often come with rewards programs, cashback incentives, and robust security features. In contrast, specialty credit cards cater to specific demographics or interests, providing tailored rewards and benefits. Examples include airline miles cards, hotel rewards cards, and store credit cards. Additionally, there's a category referred to as "Other" credit cards, which encompasses less common types like prepaid cards, secured credit cards, corporate credit cards, and charge cards. Prepaid cards are loaded with a predetermined amount of funds, while secured credit cards require a security deposit, often used for credit building. Corporate credit cards are issued for business expenses, and charge cards necessitate full monthly balance payments. Providers like Visa and Mastercard play pivotal roles in offering credit card services in collaboration with financial institutions. Moreover, credit card applications span various sectors, including food and groceries, health and pharmacy, consumer electronics, and other areas like restaurants and bars, media and entertainment, and travel and tourism. Each application segment reflects the diverse usage of credit cards across different industries, highlighting the integral role credit cards play in facilitating everyday transactions and lifestyle needs.

Opportunities exist in the UK credit card market, powered by the thriving e-commerce and travel industries. The growth in online shopping and trip bookings creates an ideal environment for credit card transactions to prosper. As customers become more reliant on digital payments, the industry is poised for enormous development. Events like London Fintech Week help to fuel this growth by showcasing the most recent advancements in the payments industry. These events not only highlight innovations, but they also promote collaboration and knowledge sharing among industry players. Pricing and segmentation are critical factors influencing the credit card business. Credit card interest rates vary depending on the issuer, card type, and individual creditworthiness. Average Annual Percentage Rates (APRs) range from 10% to 30%, indicating the variety of services tailored to different consumer sectors. Market competitiveness is further enhanced by segmentation methods, which adapt cards to different spending habits, travel inclinations, and financial profiles. This nuanced approach ensures that consumers can select cards that meet their unique needs and interests.

When compared to other European countries, the United Kingdom's financial environment follows a particular trend. One apparent difference is the prevalence of credit card use, which is significantly higher in the UK than in countries such as Germany, where debit cards are preferred. This disparity reflects varied customer preferences and banking procedures throughout Europe. While credit card prevalence in the UK indicates a dependence on credit-based purchases, Germany's preference for debit cards reflects a more conservative approach to personal finance, with an emphasis on immediate funds availability over credit-based expenditure. Regulatory regimes also differ between European countries, with the UK frequently enforcing tighter laws than some Eastern European countries. These regulations cover several facets of financial services, such as consumer protection, data privacy, and banking activities. The variation in regulatory stringency reflects different agendas and governance approaches within the European Union and its member states. The COVID-19 pandemic has had a considerable impact on credit card usage trends throughout Europe. Initially, the enforcement of lockdowns and travel restrictions caused a drop in credit card spending as customers reduced discretionary spending and limited physical shopping activities. However, as the epidemic continued, there was a noticeable shift toward internet buying, which boosted card transactions. This transition demonstrates the financial sector's agility in response to changing consumer behaviours and economic conditions.
Considered in this report
• Historic year: 2018
• Base year: 2023
• Estimated year: 2024
• Forecast year: 2029



Aspects covered in this report
• Credit Card Transactions market Outlook with its value and forecast along with its segments
• Various drivers and challenges
• On-going trends and developments
• Top profiled companies
• Strategic recommendation

By Card Type
• General Purpose
• Specialty & Other Credit Cards

By Provider
• Visa
• Master-card
• Others

By Application
• Food & Groceries
• Health & Pharmacy
• Consumer Electronics
• Other Application

The approach of the report:
This report consists of a combined approach of primary and secondary research. Initially, secondary research was used to get an understanding of the market and list the companies that are present in it. The secondary research consists of third-party sources such as press releases, annual reports of companies, and government-generated reports and databases. After gathering the data from secondary sources, primary research was conducted by conducting telephone interviews with the leading players about how the market is functioning and then conducting trade calls with dealers and distributors of the market. Post this; we have started making primary calls to consumers by equally segmenting them in regional aspects, tier aspects, age group, and gender. Once we have primary data with us, we can start verifying the details obtained from secondary sources.

Intended audience
This report can be useful to industry consultants, manufacturers, suppliers, associations, and organizations related to the Credit Card Transactions industry, government bodies, and other stakeholders to align their market-centric strategies. In addition to marketing and presentations, it will also increase competitive knowledge about the industry.