If you are reading this blog as a business owner, it will be exceptionally useful to you!
This blog reviews what the current markets are for different payment methods including card and contactless payments but also the declining use of cash. The reason we are doing this is to try to help, support and provide useful information for businesses and consumers too.
Back in 2019, UK Finance reported that 51% of all transactions were made via card and contactless payment methods. Card and contactless payments overtaking cash would have been unfathomable 20 years ago, but that is how the market was two years ago. Therefore, card and contactless payments had another year to grow and further overtake cash usage but once the pandemic hit, these payment methods skyrocketed. Due to concerns that handling cash could transmit COVID-19, many were put off accepting or using cash as a payment method and this was encouraged by the government. Thus, meaning card and contactless payments were used most of the time. There are even reports lately stating that supermarkets are committing to accepting cash, who would have thought that places would have to commit to accepting cash two years ago? But that is how the payments sphere has changed and that emphasises the need for your business to accept card and contactless payments if you aren’t already doing so.
As a business owner, back in 2019 having card and contactless overtaking cash as the majority payment method used in transactions in the UK, may alone have influenced you to consider accepting these payment methods as it is over 50% of the market. But now, with the COVID-19 pandemic it has changed consumer attitudes towards cash, card, and contactless payments – previously card and contactless were used frequently but they were limited due to the £30 limit. If you look back across previous years you soon see a pattern of behaviour that has meant card and contactless adoption has been on a steady rise. So, it is likely that these payment methods are here to stay even after the pandemic.
Card and Contactless
This pandemic has had a drastic effect on payments as a whole, but especially impacted the decline of cash and the further development of alternative payment options such as eCommerce and contactless. It is hard to imagine but some areas are already cashless societies. As shown by this quote by Finextra:
“Mastercard’s study reveals that 66% of UK transactions are contactless. Three quarters (76%) of Brits say they are very likely to continue using contactless payments after the pandemic ends, with 66% saying contactless payments are now their preferred way to pay when making purchases in-store.”
Due to this virus, the concerns with cash exchange and whether you can contract the virus from cash has meant that it has changed consumer habits and desires. Now that many shops have opened their doors on the high street, consumers will venture instore, but the coronavirus is still in the back of their minds, it is a health and safety issue. Therefore, how many customers do you think you will lose as a business if they hear that your store hasn’t got contactless capability? This is something you need to consider, at the very least.
Another factor that we have not mentioned which is going to increase the number of purchases and the amount of money spent using contactless payments is the fact that the contactless limit increased from £30-45 in April 2020 and was confirmed that there is a plan to increase again later this year to £100. Meaning consumers can purchase higher ATV (average transaction value) items. The £30 rise to £45 was already in the pipeline, but the coronavirus sped up this process and saw it implemented. This means that people can go into shops and pay for more items or buy more expensive items with contactless.
In conclusion, card and contactless payment methods have been on a steady and ever-growing upward trajectory and this does not appear to be slowing anytime soon. These payment methods dominated even before the recent global pandemic we currently face, which will only increase their usage. This has, and will, continue to change the nature of taking payments especially as consumers use card and contactless methods more.
As a business, it is a difficult and competitive market already due to the increased safety concerns and the unknown of what post-lockdown life could look like. However, card and contactless capability is one definitive thing that you can implement to maximise your business and ensure you are not missing out on valuable sales.