Contactless Transactions Grow Huge in 2020
Across the UK, in-store contactless transactions reached a record 88.6% of all in-person card payments in 2020. With nine in ten eligible card transactions – that is, physical credit or debit card payments up to £45 – being contactless last year.
The data released by Barclaycard on 22 January marks a significant moment in the progress of contactless payments. With more and more people taking precautions to avoid catching the virus, contactless payments became the most popular payment form.
Among the research, it was revealed that there was a 7% rise in contactless payments last year. At the same time, the average value of each contactless transaction rose by 29%. There was also an average of 141 payments made by each person, worth a total of £1,640.
Growing Calls For Further Increases
Data reports like this back up UK Finance’s calls earlier this month to increase the contactless limit again. The treasury has been asked by the Finance body to increase the Island’s contactless limit from £45 to £100. Since the new limit in April, the average value of contactless transactions has jumped to £12.38. That is almost a third (29%), compared to 2019 when the average was £9.60.
When the contactless limit was raised to £45 back in April, supermarkets took just two weeks to adjust to the new measures. For smaller retailers, more time was required to re-adjust their card readers. However, the way in which retailers speedily adapted is impressive, given that when the last contactless limit increased to £30, it took nearly two years to implement the change.
Over 65s Are Starting to Embrace Contactless Payments
“Looking at the contactless spending habits of different age groups, the over-65s were most likely to embrace the technology for the first time,” Barclaycard says in its report.
The over 65 age group saw a 12% increase in the number of active contactless users. This was 5% higher than all age groups combined.
Supermarkets See a Steep Rise in Usage
Among all the retailers, supermarkets were the ones who saw the most growth in contactless users, with payments via this method climbing 29.4% year-on-year. Petrol stations also saw significant growth, with usage being up 24.7% from the previous year.
Cash Usage Saw a Decline
There’s no question that the pandemic played its part in increasing these percentages and boosting the usage of contactless payments. As more people transitioned to contactless payments, it comes as no surprise that cash usage declined. According to Link, cash usage plunged by 50% in the UK over the last week of March. While overall cash usage for the year was down by 38% due to Covid contact fears.