Total annual UK contactless spending reaches £69bn

Tap and pay accounted for more than 40% of all card transactions in 2018 and total UK contactless spend reached £69 billion over the course of the year, according to industry figures.

Banking and payments representative group UK Finance said 123 million of the UK’s 159 million debit and credit cards now incorporate the near field communication technology to enable a contactless payment.

The leap to £69 billion in contactless payments represented an increase of almost a third on 2017’s figures. In total there were 7.4 billion contactless transactions in 2018, which was up by 31% on the previous 12-month period.

Debit cards are the dominant form for this type of payment, UK Finance said, but contactless credit card payments are growing at a faster rate – up by 44% on the previous year.

Total spending on debit cards in 2018 was £584 billion, up by 3.7% on the year before, while credit card spending increased by 7.8% to £192 billion.

Eric Leenders, managing director for personal finance at UK Finance, commented: "Many of us are now reaching for our cards or mobiles rather than cash to make low-value purchases, as customers opt for the convenience and security of paying with contactless. 

"There has also been an increase in credit card use although growth in outstanding balances has slowed, suggesting many consumers are using their cards for day-to-day spending rather than as a means of borrowing.”

There are, of course, question marks over whether the switch to an increasingly cashless world is good for all in society.

Earlier this month, the independently compiled ‘Access to Cash Review’ published its final recommendations, which called on the government, regulators and banks to act now on ensuring people still have access to cash or risk leaving millions behind.

The review concluded that digital payments do not yet work for everyone and around eight million adults in the UK would struggle to cope in a cashless society.

The report also found that cash is only used for three in every ten transactions, down from six in ten a decade ago and is forecast to fall as low as one in ten transactions within the next 15 years.

It argued that this shift away from cash towards digital payments is placing significant strain on the UK’s cash infrastructure which currently costs around £5 billion a year to run.

Natalie Ceeney, independent chair of the Access to Cash Review: “There are worrying signs that our cash system is falling apart.

“ATM and bank branch closures are just the tip of the iceberg, underneath there is a huge infrastructure which is becoming increasingly unviable as cash use declines.”

She added: “If we sleepwalk into a cashless society, millions will be left behind. We need to guarantee people’s right to access cash and ensure that they can still spend it.”