Covid-19: Card payments increase by three-quarters due to cash fears

Card payments have increased by three-quarters during the Covid-19 pandemic due to consumer fears over handling cash, new data from PayPoint has found.

In a trading update, the payment service revealed that card payments went up by 75.3% year-on-year in the period from 1-17 April, and by 74.4% from 18 April to 17 May. During the same periods, ATM transactions fell by 39.9% and 33.31%, respectively, which PayPoint attributes to customers being more reluctant to use cash and spending more time indoors as a result of the pandemic.

This is a rapid acceleration on a trend that was taking place before the crisis, with PayPoint reporting that card payments grew by 20.6% in the full year up to 31 March 2020 while ATM transactions fell by 4.1% in the same period.

The reduction in ATM transactions is also partly a result of the enforced closure of non-essential retail stores due to the UK government’s lockdown measures introduced on 23 March.

Consumers have additionally been quick to make use of the increase in the contactless payment limit from £30 to £45 that has been available in some stores from 1 April, with concerns over using touchscreen technologies such as Chip & PIN prevalent during the pandemic.

The greater reluctance to use cash payments is a trend that Covid-19 is expected to accelerate in the long-term.

Paypoint commented: “Card payments have benefited from the increase in convenience store sales and health concerns related to handling cash.”

It continued: “It is likely consumers’ cash usage habits will fundamentally change, however the need for cash access, as a contingency and for vulnerable consumers, will continue to be important.”

In the trading statement, PayPoint recorded a pre-tax profit of £56.8 million in the year ended 31 March 2020, a rise of 3.8%.

Nick Wiles, chief executive of PayPoint added: “The Covid-19 crisis began to escalate late into our financial year with limited financial impact in the results we are reporting.”