Contactless card spending will account for almost half of all transactions made in the UK by the end of next year as the pandemic has “forever changed the way consumers spend their money”.
Chip-and-pin card payments have been overtaken by contactless transactions for the first time, according to a new report from VoucherCodes, conducted by the Centre for Retail Research.
Prior to the pandemic, around 37 per cent of all transactions were made via chip-and-pin payments, while just 17 per cent were made contactlessly.
Throughout 2021 and 2022, chip-and-pin payments are forecast to drop to just 25 per cent of all transactions, while cash is also set to see a significant drop in usage falling to just 11 per cent.
Meanwhile, contactless card payments will rise to 47 per cent of the total by the end of next year, bringing card payments in total to 72 per cent of all spend.
“Covid-19 has forever changed the way consumers spend their money,” VoucherCodes lifestyle editor Anita Naik said.
“With exponential increases in online orders during the pandemic, combined with increased contactless limits and retailers implementing cash bans, people have quickly adapted to relying on contactless payments for the bulk of purchases as a result.
“It remains to be seen whether the government will amend laws relating to legal tender, enabling retailers to permanently refuse to accept cash if they wish.
“Ultimately, only time will tell, but in the immediate future, whereby cash was once key, contactless is our future.”