Nine out of 10 UK card payments in 2020 were contactless

by Joseph K. Clark

Contactless payments accounted for 88.6% of total card payments in 2020, as restrictions on contact-based payments drove people to the payment method, according to data from Barclaycard. Despite many shops closing for long periods during various lockdowns to reduce the spread of Covid-19, the total value of contactless payments increased by 7% in 2020 compared to 2019. For example, there was a 29% increase in the use of contactless in UK grocery stores.

Contactless cards, which enable users to make payments by scanning a reader when checking out, were first introduced in 2007 with a £10 spending limit. This limit has gradually increased, and the maximum contactless payment permitted is now £45 after it was brought up from £30 in April 2020.

The decision to increase the limit on contactless spending to £45 has driven the average value of contactless payments by 29% during 2020, to £12.38, compared with £9.60 in 2019, said Barclaycard.

The banking industry trade body UK Finance wants the limit raised. It recently asked the HM Treasury to consider increasing the maximum amount paid using contactless cards from £45 to £100.

While the economic benefits of raising the contactless payment method are plain to see, there are security fears. Contactless cards do not verify whether the person making the payment is the card owner. This is different from a payment method such as Apple Pay, where a fingerprint is needed, and as a result, spending on contactless cards is limited. But UK Finance said contactless-only fraud equates to just 2.5p in every £100 spent.

UK card payments

Barclaycard said that users made 141 payments using contactless in 2020 on average, which was worth an average of £1,640 in total.

Raheel Ahmed, head of consumer products at Barclaycard, said: “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.”

According to UK Finance data, around two-thirds of debit card payments in September 2020 were contactless, a record high. UK Finance found that 64% of all debit card transactions were made by contactless cards, compared to 62% in the previous month.

The value of overall contactless spending was also up by over 18% compared with the same period last year. The growth in contactless payment adoption is spurring development in the industry, and banks are attempting to increase contactless limits through internal IT development. For example, BNP Paribas has a project to add biometric authentication to contactless payments with a Visa card stores fingerprint information. This will allow customers to make high-value payments using contactless cards.

In October 2020, Capgemini’s World payments report revealed that 38% of people have started using a new payment provider during the lockdowns.

It also revealed that contactless cards were the second most popular payment method, with 64% of people using them “often”. Only internet banking and direct account transfers were used more throughout the health crisis (68%).

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