Figures from the trade body found contactless payments accounted for 64% of all debit card transactions in September, compared to 62% in August.

More than four in 10 (46%) of all credit card transactions were contactless, a small increase on the previous month.

The total number of contactless card transactions fell slightly by 1.1% compared to August, and was down by 5.3% compared to September 2019.

The value of contactless spending, however, was 18.1% higher than in September last year, as consumers continued to make use of the increased £45 contactless spending limit.

The total value of contactless transactions was £8.2bn in September, up from £7bn in September last year.

Overall, there were 1.1 billion debit and credit card transactions in the UK in September, a 4.2% decline compared to August, and 31% fewer than in September last year.

The total spend of £48.9bn was 5.1% less than the previous month, and 18.3% less than last September.

UK Finance says this can likely be attributed in part to the introduction of stricter social distancing restrictions implemented to combat the spread of Covid-19.

The number of transactions made by UK debit cardholders reached 1.6 billion in September, a 2.9% increase on the previous month – and a 6.1% increase on September last year. The total spend of £58.5bn was 0.2% higher than August, but 12.8% higher than last September.

September also saw the UK’s annual growth rate of outstanding balances on credit cards continue to decline, contracting by 14% over the previous 12 months as a result of repayments outstripping new borrowing in the year.

Eric Leenders, managing director of personal finance at UK Finance, said: “September saw the proportion of contactless debit card payments hit a record high for the second month in a row, rising to 64% of total transactions in August. The value of overall contactless spending was also up by over 18% compared to the same period last year, as consumers made further use of the increased £45 contactless spending limit.

“Debit card spending remained a preference as consumers continued to opt for more immediate settlement of payments as a means of managing their finances amid this year’s economic uncertainty. The total spend of £58.5m was much the same as in August, but 12.8% higher than in September last year. Given the popularity of debit card spending, the annual growth of outstanding credit card balances continued to contract, dropping 14% over the year to September as repayments continued to outstrip new borrowing.”

Pete Wickes, general manager at Worldpay said: “Consumer behaviour around payments has shifted rapidly this year. The pandemic has acted as a catalyst for widespread change. The value of contactless payments is increasing year on year – despite the lockdowns.

“Even though 75% of UK consumers find it easier to pay using contactless, 47% are still worried these types of payments are not secure and have significant security concerns. More needs to be done to reassure consumers about the security contactless payments. As businesses move towards reinventing for the ‘new normal’, digital wallets with additional layers of security, such as biometric authentication, could hold the key to alleviating security concerns and help merchants win trust and loyalty with consumers.”