Contactless payments account for about 87% of face-to-face transactions in the UK, according to data from Lloyds Bank.
Since their introduction, contactless payments have been on an upward trend.
From around 43 million transactions in January 2015, according to Statista, contactless transactions had already more than doubled by July 2015 to 88.9 million.
By the start of 2020, before Covid, contactless payments had increased ten-fold to 889 million transactions.
Since then, with the pandemic forcing more customers and businesses to switch to contactless, they’ve rocketed to around 1.3 billion transactions a month in the UK alone.
Since the introduction of contactless payments in the UK, the number of people – and businesses – taking advantage of the technology has continued to grow. With no signs of slowing down.
With millions of transactions happening in the UK every day, it’s interesting to note how many of these payments use contactless technology.
Why have contactless payments become so popular?
The reasons people choose to use contactless may seem obvious. But some of them might not be as clear-cut as you think.
Speed & ease of use
The clear advantage of contactless payments over the more traditional chip and pin payments is the speed and no-hassle approach to spending.
On average, contactless payments take around 15 seconds from beginning to end. This is leaps and bounds ahead of chip and pin payments, which can take well over 30 seconds.
People lead busy lives in 2023, and contactless payments are a clear and effective time-saving tool in everyone’s pocket.
COVID & health fears
While contactless payments had already been on a long-term upward trajectory before the coronavirus pandemic, there’s no denying it had a massive impact on speeding up the adoption of tap-to-pay transactions.
With governments and health bodies regularly advising customers to ditch cash in favour of more hygienic contactless payments, and many businesses refusing to accept cash in order to protect staff, it was inevitable that contactless would become the predominant payment type.
The key thing is that this shift effectively forced customers who’d never considered using contactless payments (or had previously been wary about them) to use them for the first time, introducing them to the benefits.
And many of these customers haven’t gone back to cash.
Increased spending limit
One of the early criticisms of contactless payments was that, with a spending limit of just £10, they were restricted to only low-value transactions.
For the most part, this was a strategy deployed by banks to test the waters and assess whether contactless payments would be popular.
It was also at a time when contactless security was in its infancy and there were some concerns about the damage to customers if a criminal got hold of their contactless card. Today we know that contactless payments are highly secure.
By 2020 the contactless limit had jumped to £30. During the early months of COVID, the limit was increased again to £45 to help consumers complete higher-value purchases.
Eventually in 2021, the limit was increased again to £100 (the average family grocery shop).
This latest increase opened contactless payments up to much higher value transactions, which has increased their popularity.
Along with this, digital payments like Apple Pay and Google Pay provide customers with even higher payment limits (in some instances there are no limits).
Contactless payment figures in the United States
For comparison to the UK, at the beginning of 2022, just over half of Americans were using contactless payments – over 160 million people. Once again, this number will have increased significantly since that time.
Contactless payment figures in Europe
Europe is also widely adopting the contactless trend. But certain countries are pulling away from the rest of the pack.
According to data featured on Inepro, Sweden and Norway both have very high rates of contactless use, with the former allowing vendors to refuse cash outright. Norwegians are also storming ahead in the mobile payments department, with 95% of citizens now taking advantage of the technology.
This just goes to show that the contactless boom isn’t limited to UK shores. It’s a worldwide innovation that’s completely revolutionised the way we shop and spend.
Why accepting contactless payments is the smartest move
Along with all of the above, accepting contactless payments in 2023 puts businesses alongside millions of others already taking advantage of the method. But it’s also very good for business from a growth perspective, too.
A study into the psychology behind spending found contactless payments present a similarly relaxed feeling towards spending as one might feel when using a credit card.
With a credit card, some buyers are far more encouraged to spend, safe in the knowledge they have time to pay off the debt.
It’s not precisely the same, but the quick nature of contactless payments follows a similar psychological trend.
In other words, if you offer contactless payments, there’s a strong chance buyers will spend more with you.
Looking to add or improve contactless payment options in your business? Handepay offers a great range of machines and options to suit your needs.
Head to https://handepay.co.uk/ to find out more.