Generous Britain donates £1 billion on plastic cards in 2007

APACS, the UK payments association, has issued figures confirming that donations to charitable organisations on plastic cards reached £1.013 billion in 2007- up from £842 million in 2006.

This is the first time donations on plastic have gone through the £1 billion barrier. By volume, this represents an increase of 23% (from 18.5 million in 2006 to 22.6 million in 2007). The increase is comprised of 2.9 million more debit card and 1.3 million more credit card payments, proving that debit cards remain the popular option when donating. The average value of a donation on a plastic card in 2007 was £44.75.

Affinity cards are another way in which consumers can contribute to charity, but without any extra personal cost, as the card issuer makes a donation to the particular cause linked to that card. Typically the issuer will donate when the account is first opened, or the card activated, thereafter making a specified payment depending on the card usage. Last year £7.5 billion was spent on the 4.8 million affinity cards in issue in the UK, which represents an 8% increase from the amount spent in 2006. Comic Relief is just one example of many hundreds of charities that benefit from affinity cards.

The plastic card industry has traditionally shown its support for charitable causes by agreeing to waive interchange fees for the high profile cross-charity and disaster or emergency appeals ensuring that the charity receives the full amount of the donation. Interchange is a fee paid by a retailer’s acquiring bank to a card issuing bank each time a card is used. The Sport Relief campaign coming up this weekend (14th-16th March) will benefit from this concession.

Despite huge amounts being donated on plastic, setting up a standing order or Direct Debit still seems to be the preferred way of donating as we donate both more money and make more donations by Direct Debit. This is probably down to the convenience and peace of mind that this payment method offers and explains why more and more charities are accepting these payments.

Sandra Quinn, Director of Communications at APACS said: “Last year we donated a staggering £1 billion on our cards and it seems very likely that our increasing preference to pledge by plastic has been spurred on by all the growing opportunities to pay online or over the phone. The first time many of us used our plastic to donate was on the back of the massive Asian Tsunami appeal and since this time, the average monthly volumes and values donated to charitable organisations by card has continued to rise.

“Wednesday’s budget announcement confirmed that charities will continue to reclaim gift aid at 22%; however, a lower rate will be introduced in the future. When reviewing our finances we should therefore aim to give as generously as we can.”