Huge leap to contactless payments in past three years

Figures from Lloyds Bank have shown how Covid-19 changed the way people make face-to-face payments, with almost 90% now contactless.

According to the numbers from the UK bank, 65% of face-to-face payments were made using contactless debit cards in June 2019, in the early stages of the pandemic – but by June 2022, this had reached 87%.

The bank said that in June 2020 the proportion of face-to-face payments made by contactless debit cards was 72%, and in June 2021 it was 83%.

Contactless cards were first made available in the UK in 2007. Back then, there was a £10 spending limit. That limit increased to £30 by 2020, but has seen significant increases during the pandemic. It was increased to £45 in April last year, and now it is £100.

“The convenience of a contactless payment is clear when you look at the growth in this type of payment over time, with 87% of face-to-face debit card transactions now made using the technology,” said Gabby Collins, payments director at Lloyds Bank.

Lloyds’ mobile app enables customers to choose their own spending limit up to the maximum of £100. About 800,000 of the bank’s customers have used this tool since it was introduced in 2021.

Covid-19 spurred the take-up of contactless. When the pandemic took hold, people were told to limit physical contact, including reducing their use of cash. Contactless payment technology, as the name suggests, was an ideal replacement for cash because, unlike mobile phone payment apps, most people already used payment cards. This led groups of people such as the elderly, usually slow to adopt the latest technology, to take it up.

Figures from banking industry trade body UK Finance, published in March, showed that almost £166bn was spent in the UK in the past year using contactless technology, compared with £80.5bn in 2019.

Its recent UK payment markets 2022 report said the pandemic had a transformative impact on the payments market, accelerating the continued decline in the use of cash payments, while the use of debit cards also slumped after years of rising usage.

“It also led to changes in the types of payment that were used,” said the report summary document. “People made greater use of contactless payments, online banking and mobile wallet channels, largely at the expense of cash payments.

According to figures from Lloyds, 95% of restaurant bills are paid in the UK using contactless technology – which also includes mobile wallets – while 83% of payments in supermarkets are contactless.