Contactless set to become Britain’s most popular payments medium

Contactless spending is expected to account for 47% of all UK transactions by the end of 2022, as it becomes the most popular payment method for the first time, according to research carried out by the Centre of Retail Research on behalf of by VoucherCodes.

The study shows that pre-pandemic in 2020, chip and PIN was the most popular payment method, accounting for 37% of all transactions in the UK.

During the same period, only 17% of all payments made were contactless.

However, between 2021-2022, chip and PIN payments are forecast to decline to just 25% of all purchases and cash will see a sharp decline, accounting for 11% of all payments by the end of 2022.

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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 purchasing goods during Covid-19.

Shoppers swapped cash for card 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 72% of all transactions.

Anita Naik, Lifestyle Editor at VoucherCodes.co.uk, comments: “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.”