A report by UK Finance Payments Markets has found faster payments volume shot up by 23% to 3.6bn from 2020 to 2021.
According to Finextra, contactless payments appear to be a particular area of growth with almost one third of all payments in the UK made via contactless methods last year, up 36% from 2020. Meanwhile, 58% of customer card payments were made by contactless.
While still remaining the second most popular payment method at 15% of payments, cash payments are down by 1.7% for the year of 2021. It was found that up to 1.1 million UK consumers still primarily use cash in their day-to-day shopping.
UK Finance also projected that cash usage will only account for 6% of all payments made in the UK by 2031. They said they ‘do not anticipate a cash-free society, but rather one where cash is less important’.
The number of debit and credit payments – which fell in 2020 – rose again to 22.9 billion payments in 2021. Debit card payments remain the most common, climbing by over 23% to 19.5 billion payments.
The report also found that 12% of people had used BNPL in 2021 will almost equal numbers of male and female consumers. Younger consumers were more likely to use BNPL than older ones, while the 35-44 year old age bracket was the one that used it most.
Adrian Buckle, head of research at UK Finance, said: “Payment trends generally tend to change slowly, as we all form habits about the way we pay for things and these don’t change easily. However, the pandemic accelerated the pace of change in 2020, in particular the reduction in the number of cash payments.
“In 2021 we saw the total number of payments return to pre-pandemic levels and a return towards the long-run trends in payment method usage. Contactless continued to be popular, accounting for almost a third of all payments. Cash usage fell slightly, although remained the second most commonly used payment method. These are trends we expect to continue over the next decade, alongside a continued decline in cheque use, and an increase in the number of people using remote banking.”
Earlier this year, the UK’s Financial Conduct Authority (FCA) upped the limit of contactless payments, with the cap on single transactions rising from £45 to £100.
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