More evidence of the increasing use of card and contactless payments instead of cash has come in reports by UK Finance, the trade body for the banking and finance industry, and by Barclaycard Payments.
Card and contactless payments continued to increase in 2019, with card payments accounting for more than half (51%) of all payments for the first time, according to the latest UK Payment Markets report from UK Finance.
Debit cards were the most used payment method in the UK with 17 billion payments, of which seven billion were contactless. Consumer use of credit cards also rose during 2019, up by 7% to 3.3 billion payments, driven partly by the increase in contactless credit cards issued last year with 1.3 billion credit card payments made via contactless in 2019.
The number of contactless payments across debit and credit cards increased by 16% to 8.6 billion.
Cash payments continued to decline in 2019, falling by 15% to 9.3 billion payments, although cash was still the second most popular payment method in the UK after debit card. The number of people who were not using cash or using cash just once a month has more than doubled in two years (3.4 million in 2017 and 7.4 million in 2019).
Stephen Jones, CEO of UK Finance, said: An increase in ways to pay coupled with the change in people’s payment habits may have inadvertently gone some way to prepare the nation for the impact of Covid-19 on their daily lives. With consumers already using contactless payments and remote banking more than in previous years, these technological advances have allowed many people to shop and make payments safely from home or in store. The impact of Covid-19 may accelerate these habits for many customers; however, we are fully aware that not all customers are digitally-enabled which is why we are working flat out to ensure people have access to cash and everyday banking services remain available to help the country through these difficult times.
Natalie Ceeney, chair of the Access to Cash Review, said: In 2019 we saw a further decline in cash use of 15% – although the fact that over nine billion payments were made in cash in 2019 shows how many people still depend on it. This UK Finance data was taken before the impact of Covid-19, which has accelerated the shift to digital payments and further challenged the viability of the cash infrastructure. It’s essential that we ensure that everyone is included in our economy, and until digital payments work for everyone, we need to maintain people’s ability to access and pay with cash.”
Barclaycard Payments, which handles almost 40% of all credit and debit card transaction in the UK, released data that revealed:
• Since the introduction of the new £45 contactless limit in the UK, Barclaycard Payments has processed more than 25 million contactless payments above the previous £30 limit;
• The total value of these 25 million contactless payments is more than £900m, with an average transaction value of £36.29;
• Overall, more than 90% of face-to-face transactions are now made using contactless;
• Barclaycard processed 23% more contactless transactions in 2019 compared to 2018;
• 57% of in-store transactions at small businesses between £30 and £45 are now made using contactless;
• Barclaycard Payments handles half of all contactless transactions in the UK
Rob Cameron, CEO of Barclaycard Payments, said: “Just as consumers are becoming more comfortable with contactless and digital payments, we’ve also witnessed this same behavioural shift with our merchant clients. Not only are they placing more emphasis on their payments systems, they’re also considering how providing a quick and easy payments process improves the overall customer experience.
“Coronavirus has only accelerated this trend, with many traditionally face-to-face businesses switching to online and distance selling for the first time in order to adapt and grow, and it will be interesting to see how card payments continue to evolve in the months ahead.”