Contactless payments accounted for 88.6% of total card payments in 2020, as restrictions on contact-based payments drove people to the payment method, according to data from Barclaycard.
Despite many shops closing for long periods during various lockdowns to reduce the spread of Covid-19, the total value of contactless payments increased by 7% in 2020 compared to 2019. For example, there was a 29% increase in the use of contactless in UK grocery stores.
Contactless cards, which enable users to make payments by scanning a reader when checking out, were first introduced in 2007 with a £10 spending limit. This limit has gradually increased, and the maximum contactless payment permitted is now £45 after it was brought up from £30 in April 2020.
The decision to increase the limit on contactless spending to £45 has driven the average value of contactless payments by 29% during 2020, to £12.38, compared with £9.60 in 2019, said Barclaycard.
The banking industry trade body UK Finance wants the limit raised. It recently asked the HM Treasury to consider increasing the maximum amount paid using contactless cards from £45 to £100.
While the economic benefits of raising the contactless payment method are plain to see, there are security fears. Contactless cards do not verify whether the person making the payment is the card owner. This is different from a payment method such as Apple Pay, where a fingerprint is needed, and as a result, spending on contactless cards is limited. But UK Finance said contactless-only fraud equates to 2.5p in every £100 spent.