April 30, 2021
2020 was a big year for contactless payments.
Not only did contact free payments help us contain the spread of a virus, but they very quickly became the default payment method thanks to their convenience, speed and widespread adoption.
But to what extent did contactless payments take over all payments? And what does that mean for the future? We put together some of the most important UK and worldwide contactless payments statistics.
In 2020, digital payments as a whole saw a huge increase in adoption. According to the World Payments Report by Capgemini, digital payments grew by an astounding 53%.
Not only that, but customers have been experimenting with new forms of payments, including:
Of all the regions, APAC had the highest amount of global non cash transactions, reaching 243.6 billion transactions in 2019 - a growth rate of 24.7% in just a year. In the EU, non cash transactions grew by 12% from 2018 to 2019.
Learn more about how we help businesses take payments with QR codes.
Mobile payments are also on the rise, with Capgemini predicting that the CAGR will be even greater in the coming years.
What about contactless payments specifically? In Capgemini’s 2020 August survey, 64% of respondents said they used contactless cards throughout the Covid-19 pandemic, with 41% of consumers saying they used them for the first time.
Digital wallets and QR code payments are also increasing, with digital wallet users growing from 2.3 billion to 4 billion in 2024. According to the report, there are two main reasons:
One of the other advantages of QR code payments is that they are contact free, and quickly became a popular payment method throughout Covid-19.
Find out more: QR Code Payments: What They are and How to Get Started
Although credit and debit card payments still dominate eCommerce payments, mobile payments are catching up, coming in fourth:
Millions of customers are getting more comfortable with digital payments, with Sweden, Norway, Denmark and the UK, reportedly using the lowest amount of cash in 2019, according to Statista.
With Pomelo Pay, business owners can take advantage of the wave of digital payments and set up their own eCommerce store with an online ordering system. With our unified commerce approach, businesses can accept payments with QR codes, payment links and through their website.
What about specifically in the UK? The UK has seen one of the largest increases in contactless payments in the world. This is partly due to the contactless payment limit increase from £30 to £45, as well as a rapid adoption of contact-free payment methods.
According to UK finance, contactless payments accounted for 41% of all credit card transactions and 60% of all debit card transactions in December 2020 - a huge jump of 25.8% when compared with December 2019.
When comparing both years, 88.6% of all card payments in 2020 were contactless, according to Barclaycard. With the value of contactless payments increasing by 7%.
Did the contactless payment limit have an influence? According to Barclaycard, yes. Since the new £45/€50 contactless limit was introduced, the average value of contactless transactions increased from £9.28 to just under £14, with the total amount spent on contactless transactions over £30 already at more than £264 million.
Want to accept contactless payments? With Pomelo Pay, you can get started with just your smartphone.
In total, up to 7 million additional cardholders were able to use contactless for in-store payments in 2020.
The value of debit card transactions has increased, and it’s also interesting to note that while debit card usage has increased, credit card usage has decreased.
It’s also interesting to note that debit card usage increased, whereas credit card usage decreased.
It’s clear that more customers are paying with contactless payments than ever, but are businesses also deciding to shift towards contactless payments? Based on our findings at Pomelo Pay and several sources, yes.
According to Capgemini’s World Payments Report, corporate executives are saying that over the next two or three years, mobile payments are their second biggest digital payments initiative, behind virtual cards.
As Mark Buitenhek, Head Transaction Services at ING says:
“Instant payments are accelerating in the B2B space as treasurers consider them a differentiator. We worked with large retailers in the Netherlands for QR code payment based on instant payments for grocery delivery. The solution witnessed massive uptake as it solved reconciliation issues for the client and retailer.”
According to a global Visa Study, 67% of small businesses along with 78% of consumers adopted new payments behaviours to adjust to Covid-19. What’s even more interesting is that two thirds of customers now say they would switch to businesses that are offering contactless payment options, with three quarters saying they have changed how they pay due to the pandemic.
That’s because 46% of consumers believe that contactless payment methods are one of the most important safety measures that retailers can undertake, and even 48% saying they refuse to shop at stores that don’t offer contactless payments.
With the huge increase in contactless payments, it’s no wonder that the NFC market is on course to reach almost $50 billion by 2024.
You may like: What are NFC Mobile Payments and are They Safe?
Businesses have responded to the increase in demand, with 33% of SMBs reporting that their business has accepted less or stopped accepting cash since Covid-19.
In 2020, 4 out of 10 payments received by businesses were done by card.
According to a BRC Payments Survey, the most common payment method is card payments - it’s convenient for customers, most people know how to use them online and in-person and it's the most secure payment method.
Having said that, with more consumers purchasing online than ever before, merchants are looking at alternatives when it comes to taking payments. These are payment methods such as payment links and ewallet transactions such as Apple and Google Pay.
More businesses are looking to bridge the gap between online and offline, and are therefore looking to add eCommerce in order to take payments online. By connecting to a payments platform, businesses can receive insights and data about their payments habits all in one platform.
1. More people are using contactless payment methods than ever
Contactless payments are convenient, secure and fast. More people will be using contactless payments in the coming years and it’s likely to become a default payment method.
2. The contactless limit increase means people are spending more with contactless payment methods
Accepting contactless payments means customers are more likely to spend more money.
3. Cash usage is decreasing
Every single European country is reporting a decrease in cash usage, and many businesses no longer accept cash as a payment method. Now, people prefer paying with mobile payments, QR codes, payment links and ewallets. Businesses that accept more online payment methods are likely to see an increase in sales.
Contactless payments took over payments in 2020. Every generation was affected, and many businesses used this as an opportunity to begin accepting card payments. And as many are saying, this seems to be a trend that won’t go away: the convenience of contactless has caught on, and there’s no looking back.
Data Scientist, Jee Yen Hee, discusses the importance of data for businesses in the latest Opinion Series.
The future of shopping is unified commerce. But what does that mean and why should you care? We've put together this guide to help you learn more about unified commerce.