With the decline in use of cash, consumer and business payment habits have returned to their pre-pandemic patterns, while the use of debit cards and contactless payment methods is increasing.
ie according to of UK finance UK Payments Market 2022 The report, which documents changes in how consumers paid for goods and services in 2021 and confirms that there were a total of 40.4 billion payments in the country last year.
The report said the COVID-19 pandemic had a transformative effect on the payments market by accelerating the continued decline in the use of cash payments, while debit card usage also declined after years of increasing usage.
“The pandemic not only reduced the total number of payments made in the UK, but it also changed the types of payments made,” the report summary document said. “People have made more use of contactless payment, online banking and mobile wallet channels mainly at the expense of cash payments.
“This raised the question of whether these observed changes in payment patterns reflect a permanent change in people’s behaviour, or whether people’s payment preferences would revert to pre-pandemic patterns as lockdown restrictions were eased.”
And, based on data from the finance industry body, consumers seem to have reverted to their old payment habits, with debit and credit card usage rebounding in 2021 compared to 2020.
“Both debit card and credit card payments, which had declined in 2020, rose again in 2021,” the report said. “Further, the share of payments made using cards, which increased to 52% of all payments during 2020, continued to rise in 2021, with 57% of all payments in the UK made using cards in 2021.
“Contactless payments remain popular, with almost a third (32%) of all payments made in the UK during 2021 using contactless.”
With respect to cash, its use as a payment method declined again during 2021, but the slowdown was less than in 2020.
Data from UK Finance shows that cash remains the second most frequently used payment method in the UK, accounting for 15% of all payments in 2021. Nevertheless, the total number of cash payments made in 2021 was 1.7% lower than the previous year.
“The long-standing trend in cash payments over the past decade has been a steady decline, particularly with the transition to debit card payments,” it said. “In 2020, cash usage declined by 35% compared to the previous year as a result of the pandemic.
“Since 2017, cash use has declined approximately 15% each year, so 2020 represents an acceleration of this decline. In 2021, the rate of decline in cash use appears to have slowed down.
“A lot of this was expected – many parts of the economy with traditionally high levels of cash usage were closed or highly restricted during the lockdown, and in those parts of the economy that remained open, many retailers used contactless payment options. encouraged, amid fears of cash being a vector for Covid-19 transmission. ,
Looking ahead, the report predicts that the use of debit cards to make payments will continue to increase over the next decade, and over time will exceed the threshold (24 billion) for more than half of all payments made in the UK. .
“This growth will be driven by the continued growth of contactless payments, the continued growth of online shopping, and increasing levels of card acceptance among businesses of all sizes, but especially among smaller businesses,” it said.
