A payment analysis shows that 2020 was the year of contactless payments in the U.K., up 12 percent to $9.6 billion and comprising 27 percent of all payments in the region, according to the U.K. Finance 2021 Payment Markets Report report on Wednesday (June 16).
Total payments in the U.K. dropped 11 percent to 35.6 billion, the first decline since 2015. The report analyzed all payment types across 2020 and shows how the pandemic affected the way people in the U.K. made payments.
David Postings, chief executive of U.K. Finance, said the pandemic fueled changes to payments behavior and escalated “existing trends” — like a decline in cash usage and increases in contactless and mobile payments.
The boost in contactless payments also was helped by merchants “encouraging its use.” The decline in the use of cash was in part due to “large parts of the economy” in pandemic lockdown. Cash was still the second largest form of payment in 2020, with debit cards being first, Postings said.
“There remains real diversity in the way in which people choose to conduct their day-to-day spending and the banking and finance industry is committed to helping customers make payments in a variety of different ways,” he added.
The Financial Conduct Authority in March upped the transaction limit on contactless payment transactions to £100 for single transactions and £300 for multiple. The move is aimed at helping retailers bounce back from lockdowns and ease people’s transition to physical stores.
An April PYMNTS report, Cybersource Global Digital Shopping Index U.K. Edition, discovered that 55 percent of consumers in the U.K. used contactless payment methods, split between mobile wallets and contactless cards.
Cybersource Director of Unified Commerce Solutions Lee Tango told PYMNTS CEO Karen Webster that “Contactless cards have an important role to play, especially in the U.K.”
Neal Patrick, vice president of Business Transformation and Projects for skincare retailer L’OCCITANE said in a PYMNTS interview last month that the company has seen a “significant increase” in the use of contactless payments.