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Huge growth in contactless transactions

Huge growth in contactless transactions

Category: Banking

Updated: 04/05/2016
First Published: 04/05/2016

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Are you on the contactless bandwagon? Chances are, you've indulged a few times, with the convenience of being able to pay for goods with the tap of a card being too good to beat – and it seems that a growing number of people are getting in on the action.

Rising popularity of contactless…

New figures from The UK Cards Association show that around 63 contactless transactions took place per second in February, with a total of 159.1m such purchases recorded during the month. This shows that consumers are continuing to use their cards to pay for low-value purchases, a trend no doubt fuelled by last year's rise in the contactless payment limit to £30.

Indeed, the average contactless transaction has also continued to grow in value and now stands at £8.28, as people recognise the convenience of this form of payment.

Conversely, the average value of overall transactions – and those made specifically online and in shops – declined, a trend that "reflects the changing spending habits which see consumers using their cards as the preferred way to pay for increasingly smaller purchases in place of cash", it said in the report.

"With more than 60 transactions taking place a second, it is clear contactless card payments are becoming ever more popular," added Richard Koch, head of Policy at The UK Cards Association. "Whether picking up a pint of milk or buying a sandwich, customers are consistently voting with their wallets and using their cards as the predominant way of paying."

… and online

Overall, the figures show that there were 1.182bn transactions using cards in February, compared with 1.071bn in February 2015, so it isn't just contactless payments that are on the rise. In value terms, this equates to £52.4bn spent using payment cards during the month, up 7.4% from the £50.9bn spent in the same month a year ago, and online transactions have seen a particular boost in market share.

Indeed, online spending now accounts for 24% of all card payments, up from 22% last year, with 136m online transactions recorded. This means that £12.3bn of all card payments now take place online, a clear rise from the £11.5bn recorded in February 2015, equating to an increase of 16% year-on-year.

What next?

Does your banking provider not yet offer contactless payments? If not, it could be time to take a look at the alternatives, particularly if you're looking for better service overall. Check out the top bank accounts to see if you can find the right option.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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