The COVID-19 outbreak has led to the increased adoption of contactless payments as one of the preferred ways to settle transactions in the United Kingdom, now representing around 90% or 9 in 10 of all eligible card transfers (as of 2020).
The most significant milestone for the contactless technology reportedly came in April 2020, when the UK limit was increased from £30 to £45, which made a larger number of transactions eligible for contactless payment methods.
Since the introduction of the increased limit on touch-free payments, the average value of these transactions has also increased to £12.38, up nearly a third when compared to the 2019 average of around £9.60. This, according to the latest data provided by Barclaycard.
With many UK-based physical store locations unable to offer services for most of the year, because of COVID-related lockdown measures, the total number of contactless transactions actually declined by nearly 12% when compared to 2019. But due to the significantly greater average transaction value, the total transaction value increased by around 7%.
Individually, the average consumers carried out 141 contactless transactions last year, valued at a total of around £1,640. When examining the consumer spending habits across different age groups, people over the age of 65 were more eager to try using new technology solutions for the first time, with the age-group seeing a significant 12% yearly growth in the number of total active users.
Raheel Ahmed, Head of Consumer Products at Barclays UK, stated:
“We are delighted to see that even more Brits are relying on contactless to make in-store payments. We believe that contactless is the safer, faster and most responsible way to pay in store, and we encourage all consumers to take advantage of it wherever possible.”
The increase in total transactions volumes is not without its disadvantages or drawbacks, with over a third or 33% of UK customers reporting being blocked from paying with physical currency notes and coins since the beginning of the COVID outbreak. This has led to serious warnings that the cash economy may be at risk, which could be a major issue because many people still depend on physical notes to settle transactions.
A survey of 2,000 consumers performed by Which? revealed that 34% of people said they could not pay with cash on at least one occasion (when trying to purchase items after the March 2020 Coronavirus-related restrictions were introduced in the UK). Which? pointed out one very serious case where a diabetic person in urgent need of food (due to blood sugar levels) had dropped because he was reportedly refused service at two different restaurants that had gone cashless following the COVID outbreak.