ANNUAL VISA card spending in Europe topped €1,000 billion for the first time in 2010 and could double over the next five years, according to the card processor.

Visa card usage rose to account for €1 in €8 spent across the continent, according to Visa Europe, owned by 4,000 of the region’s banks. Cardholders’ overall use of Visa cards, including for withdrawals, rose 13 per cent to €1,500 billion.

More than 70 per cent of Visa transactions in Europe are carried out using debit cards, according to Visa Europe, which predicted further strong growth as issuance of “chip-and-pin” cards grew.

In the UK, where card use is relatively well-entrenched, the value of debit card transactions exceeded cash transactions last year for the first time. Visa Europe said its cards were used for £1 in every £4 spent by consumers. Debit card use expanded in Britain by 45 per cent in the company’s business year.

Use of credit and debit cards for e-commerce also grew rapidly across the continent, according to Visa Europe, which said e-commerce was now more than one-fifth of its business. The average number of transactions daily grew 38 per cent, with 7.3 million transactions on November 30th, the year’s busiest day for e-commerce.

The continued growth in debit card payments comes in spite of tough conditions across Europe.

Peter Ayliffe, chief executive of Visa Europe, said there was little sign of consumers cutting back on spending so far in 2011, although Visa Europe said credit card use had remained relatively flat last year, with a fall in credit card spending in Britain and Ireland.

The UK remains Europe’s key market for “contactless” card transactions, with more than 11 million Visa cards that can be used when brought close to a terminal.

Mr Ayliffe said chip-and-pin cards were also behind a fall in card fraud. Fraud was involved in less than five-hundredths of a cent for every euro of sales last year, according to Visa Europe. “Chip- and-pin has absolutely worked to bring down fraud.”

Visa Europe, run as a not-for-profit association, said revenues in 2010 rose by 24 per cent to €879 million. It is making a €158 million rebate to its member banks, reporting a €76 million pretax surplus to be retained to support capital and reserves. – (Copyright The Financial Times Limited 2011)