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More than a quarter of payments now contactless

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More than one in four payments made in the UK last year were contactless as consumers shunned cash amid the Covid 19 outbreak.

Figures from UK Finance show the number of contactless transactions increased by 12 per cent to 9.6 billion in 2020 and accounted for more than a quarter (27 per cent) of total payments.

In the last four years, contactless payments have jumped from being just seven per cent of all payments to 27 per cent, the banking trade body said.

Its data shows 83 per cent of people in the UK now use contactless, with no age group or region falling below 75 per cent usage.

Supermarkets, which remained open during lockdown, were the most popular place to use contactless payments in 2020, accounting for 41 per cent of all contactless transactions.

More people also turned to mobile phones and smart watches to make payments last year.

Nearly a third (32 per cent) of the adult population were registered to use mobile payments by the end of 2020, an increase of 7.4 million people compared to 2019.

Meanwhile, the use of cash plummeted, with the number of cash payments falling by 35 per cent last year

During 2020, 13.7 million consumers used cash only once a month or not at all, a significant increase from 7.4 million the previous year.

However, cash remained the second most frequently used payment method behind debit cards and 1.2 million people mainly used cash for their day-to-day spending.

David Postings, chief executive of UK Finance, said: “The pandemic resulted in some marked changes in payments behaviour and while it’s too early to say whether they are permanent changes, we did see an acceleration in some existing trends such as the reduction in cash usage and the growth in contactless and mobile payments.

“The increase in the contactless limit to £45 coupled with retailers encouraging its use meant that more than a quarter of all payments in 2020 were made via contactless. The use of cash fell, reflecting the fact that large parts of the economy were closed during the year, although it still remained the second most popular payment method behind debit cards.

“There remains real diversity in the way in which people choose to conduct their day-to-day spending and the banking and finance industry is committed to helping customers make payments in a variety of different ways.”

Last month, the country’s largest retail banks and building societies committed to ensuring people who needed it could still get access to cash following thousands of bank branch closures and a huge reduction in the number of free-to-use ATMs.

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