Almost Half of Transactions to be Contactless by the End of 2022.
Contactless spending is expected to account for almost half of all transactions by the end of 2022 (47%), as it becomes the most popular payment method for the first time, according to new research.
The VoucherCodes.co.uk Life after Covid: Prospects for online retailing, physical stores and how we pay report, carried out by the Centre of Retail Research (CRR), examined the pandemic’s effect on the way UK shoppers pay for goods.
Half of Transactions to be Contactless by 2022
>>> The use of contactless payments is set to make up 47% of all UK payments between 2021-2022 and will be the most common type of transaction
>>> Contactless payments are up by nearly a third (30%) since the start of the pandemic when chip & pin payments were still the most popular way to pay
>>> Between 2021 and 2022, cash payments will account for just over one-tenth (11%) of all purchases
>>> Forecasts show almost three quarters (72%) of payments will be made by card within the next year
The study shows that pre-pandemic in 2020, chip and pin was the most popular payment method, accounting for over a third (37%) of all transactions in the UK. During the same period, only 17% of all payments made were contactless. However, between 2021-2022, chip & pin payments are forecast to decline to just 25% of all purchases and cash payments will see a sharp decline, accounting for just over a tenth (11%) of all payments by the end of 2022.
The switch, which will constitute a 30% increase in contactless payments from pre-pandemic to the end of 2022, was accelerated by changing consumer and retailer behaviour when it comes to paying for goods during Covid-19. Shoppers swapped cash for cards for hygiene reasons, many retailers also stopped accepting cash altogether, and the contactless payment limit increased from £30 to £45.
Looking ahead to next year, card payments are expected to account for almost three-quarters (72%) of all transactions.
Anita Naik, the Lifestyle Editor at VoucherCodes.co.uk, commented: “Covid-19 has forever changed the way consumers spend their money. With exponential increases in online orders during the pandemic, combined with increased contactless limits and retailers implementing cash bans, people have quickly adapted to relying on contactless payments for the bulk of purchases as a result.
“It remains to be seen whether the government will amend laws relating to legal tender, enabling retailers to permanently refuse to accept cash if they wish.
“Ultimately, only time will tell, but in the immediate future, whereby cash was once key, contactless is our future.”