Some 17 billion contactless payments were made in the UK last year, a 30% increase on the previous year, with 87% of people using the technology at least once a month, according to the latest figures from banking industry body UK Finance. The average value of contactless payments also increased.
In 2022, a total of 45.7 billion payments were made, of which 13.1 billion used contactless technology through debit and credit cards. Meanwhile, the take-up of mobile wallets, such as Apple Pay, also increased, with 30% of people now registered for at least one mobile wallet.
“Overall, use of [mobile wallets] is still lower than use of contactless cards, but they appear to be growing in popularity and it is likely that mobile payment methods will see strong growth in the future,” said the UK Finance report.
The average contactless payment was worth £15.10 in 2022, up from £12.66 in 2021. Contactless cards were first introduced in 2007 with a £10 spending limit. This limit has gradually increased over time, rising from £30 to £45 in 2020 during the early stages of the pandemic, and hitting £100 in 2021.
Adrian Buckle, head of research at UK Finance, said contactless, online banking and mobile payments all increased last year, although cost-of-living challenges meant some people preferred to use cash to help with their budgeting.
For the first time in many years, total cash payments increased in volume from six billion in 2021 to 6.4 billion last year, but as a proportion of total payments, they fell to 14% from 15.5%. The decline of cash as a means of payment has been dramatic over the past 10 years – in 2013, cash accounted for 54% of total payments in the UK.
But despite cash bucking a trend last year, new technology will continue to shape the payments sector. “In the next decade, we are forecasting further growth in the use of card and mobile payments, and market developments such as open banking may bring further changes to the payments landscape,” said Buckle.
Buy now pay later (BNPL) services offered through fintechs are now used by one in five people aged between 25 and 34, according to UK Finance.
BNPL services are offered by an increasing number of fintech providers, Klarna being one of the biggest. Such services gained popularity during the current cost-of-living crisis because they give consumers the opportunity to spread the payments of a huge range of purchases.
