Three in ten UK consumers now use mobile phones and wearables for payments

Woman making contactless payment with NFC mobile phone
SMART SPENDING: Over 17 million people in the UK could use a smartphone to pay by the end of 2020

Some 17.3 million people or nearly a third (32%) of adult consumers in the UK were registered to use their smartphone or smart watch to make mobile payments in stores by the end of 2020, a “significant” increase of 7.4 million people compared with 2019, according to UK Finance.

The London-based trade group’s 2021 Payment Markets Report also shows that the number of contactless payments made in the UK increased by 12% to a total of 9.6bn and accounted for more than a quarter (27%) of all transactions made in 2020.

“In the past four years contactless payments have jumped from being just 7% of all payments to 27%,” the report says.

“83% of people in the UK now use contactless, with no age group or region falling below 75% usage.

“Supermarkets were the most popular place to use contactless payments in 2020, accounting for 41% of contactless payments.”

“Whereas contactless payments are widely used across different age groups, there is a notable difference in the current take-up of mobile payments,” the report adds.

“In 2020, just over 50% of 16-to-34-year-olds were registered for mobile payments compared with 11% of over 65s.” 

In comparison, the number of cash payments made in the UK fell by 35% during 2020 and accounted for 17% of all payments made in the country.

“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,” says UK Finance chief executive David Postings.

“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.”

The UK Treasury announced that it is raising the UK contactless transaction limit from £45 to £100 in March this year.

Find full and up-to-date details of worldwide contactless limit increases in NFCW’s table of contactless transaction limit changes.

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