Contactless payments have revolutionised the way we spend, giving us a quick and simple way of paying in a world where time and convenience are more valuable than ever before. The first contactless cards in the UK were issued by Barclaycard back in 2007 with a contactless limit of just £10. The idea was that this technology could be used for low-value payments for things like coffees or newspapers.
In 2021, there are roughly 135m contactless enabled cards in use throughout the UK, accounting for nearly 10 billion payments every year. There’s no doubt that this form of payment has taken off, and we’ve recently seen the contactless limit rise from £45 to £100, but what is the catalyst for this change?
Using Contactless Payments During the Pandemic
During the COVID-19 pandemic, we were all encouraged to use contactless as much as possible, decreasing the risk of spreading the virus and keeping ourselves and others safe. The knock-on effect has meant that even people who previously weren’t in the habit of using this method of payment have taken it on, even those who may previously have questioned the safety of making a contactless payment without using their PIN. ATM withdrawals actually dropped by £37bn during the 12 months of the pandemic, clearly showing the move away from a cash-using society.
Although the pandemic may have accelerated contactless payments usage, it was already something very much on an upwards trend. Since the introduction of the £10 contactless limit, the limits have increased to £30, then £45 and now £100.
Behavioural Shifts in Contactless Payments
In recent years, it’s fair to say there has been a general shift in how people manage their money. Gone are the days of knowing your bank manager personally, or even visiting high street banks; there has been a marked move to digital banking and managing money online.
There has also been a huge increase in the eCommerce world, meaning there is a far heavier reliance on online checkouts Hand-in-hand with the increase in contactless payments has been the shift to mobile wallets with people storing their card details in their phone and using these to ‘tap and pay’.
Although there may have originally been some suspicions around the safety of contactless payments, over time the benefits for consumers have become clear. Not only is this a simple way to make payments, without the hassle of putting in your PIN or handling cash, it is also far safer than previous payment methods with built-in protection that helps to prevent fraudulent transactions. See our blog on how to become a payment services provider for more information.
At Datam, we have built an innovative merchant sales and onboarding platform which is an absolute game changer in the payments realm. Our aim is to simplify the entire process, using the latest technology to help businesses overcome their onboarding issues and improve their efficiency.