Lloyds research shows no going back on contactless payments

Almost nine in 10 debit card payments made in person are now contactless, according to research from Lloyds Bank.

The number of people using contactless payments in-store has risen to 87% in June this year, compared to 83% last year and 65% in 2019.

Since the pandemic started in 2020, contactless payments have risen from 72%.

There’s no question that Covid-19 has impacted the speed at which contactless payments have been adopted, but is that the only reason?

In this article, card machine provider Handepay looks at the increase in the popularity of contactless card payments.

Contactless card payments and the covid effect

The result of the pandemic has clearly seen a switch towards more contactless payments.

At the beginning of the pandemic, governments and health bodies actively encouraged more use of contactless technology when shopping in stores to limit contact between people.

On top of that, the contactless payment limit increased twice.

First, it went from £30 to £45 in April 2020, increasing again to £100 in October 2021.

The new higher limit (roughly the cost of a weekly family shop) stopped contactless being limited to smaller purchases and made it more accessible.

As a result, the adoption of contactless payments rose much faster.

According to research from Mastercard during the pandemic, 79% of consumers said they’d switched to contactless payments for the first time.

Contactless transactions also grew twice as fast as ‘traditional’ payment methods.

At the same time, the rise of digital payments and mobile wallets (like Apple Pay or Google Pay) meant even more consumers moved to contactless payments.

So, you’d think contactless payments are a pandemic trend.

But you’d be wrong.

Contactless isn’t just for a crisis

In reality, card and contactless payments usurped cash a long time ago.

Debit card payments overtook cash as the most popular payment method back in 2018.

Even in 2017, contactless card payments grew 97% to make up 5.6billion transactions a year (roughly 35% of all card transactions).

By 2019 contactless made up 65% of debit card payments (a 30% increase).

So while covid has pushed the popularity of contactless payments faster up the preference list for consumers, it’s only supplemented a long-standing trend.

Why contactless continues to grow at pace

The most apparent reason for the rise in popularity of contactless payments among consumers is the convenience and speed at which they can be made.

Simply tapping a card against the payment terminal is enough to complete the purchase.

It makes the checkout quicker for everyone involved and means businesses can benefit from completing more daily transactions.

But the rise of payments technology has also contributed to the popularity of contactless payments, particularly digital payments and mobile wallets.

This year more than three-quarters of customers have signed up for and are using mobile wallets through their smartphones or smart devices.

Again, the speed and convenience of making payments is the biggest reason for the change.

Not only do these customers not carry cash, they also don’t need a physical wallet because all their payment cards are linked to the digital wallet on their phone.

Some customers have taken this further by linking payment cards to their smartwatches or digital payment rings.

The future of payments is contactless

It would be wrong to attribute the rise of contactless payments simply to the past few years’ events.

Undoubtedly it’s had an effect, but it’s simply sped up a trend that has been happening for the last decade.

There’s no going back on contactless payments for businesses, and it’s time to adapt to the new methods customers expect and prefer to use.

Investing in a contactless card machine that can accept digital payments and debit and credit cards has become non-negotiable for any business looking for success in the future.

The alternative is to get left behind as customers, and payment technology continues to adapt and move forward.

Christopher Stern

Christopher Stern is a Washington-based reporter. Chris spent many years covering tech policy as a business reporter for renowned publications. He has extensive experience covering Congress, the Federal Communications Commission, and the Federal Trade Commissions. He is a graduate of Middlebury College. Email:[email protected]

Related Articles

Back to top button