Contactless Payments: Has Covid-19 Changed Consumer Habits For Good?


Covid-19 is an unprecedented social and economic challenge. Few – if any – parts of the world are escaping its impact or the restrictions it is having on billions of people. Life is continuing as normal where possible. But it means a dramatic change to habits and routines in line with rules on social distancing – such as working from home, increased contactless payments and more.

In the UK, only 9% of people want a total return to ‘normal’ after the coronavirus lockdown. It means that different ways of doing things are set to become the new ‘normal’ once restrictions are lifted. But what could this mean for consumers and businesses who have been encouraged to move towards contactless payments. Will it speed up the move towards a cashless society?

The rise of contactless payments 

As a payment method, cash has been feeling the strain long before the lockdown. Debit cards became the UK’s most popular way of paying for goods and services at the end of 2017. Now, credit cards are also more popular than cash. As a growing number of payments are made by debit or credit cards, it means contactless has become more accepted.

UK Finance data shows that contactless payments were already on a major upward trend even before the Covid-19 restrictions. With a total of 721 million contactless transactions in January 2020, the data reveals double-digit growth on January 2019 – up 12.3% from 642 million. The total value of those transactions was £6.7 billion in January 2020 – up 13.6% year-on-year.

Where can you use contactless payments? 

One reason for contactless growing in popularity was the ongoing roll-out of enabled cards. In January 2020, 87% of debit cards and 74% of credit cards had contactless technology. But it’s also helped by the number of places and businesses who accept such payments.

Walk into any supermarket, convenience store, coffee shop or restaurant and it’s likely they’ll accept contactless as standard. It’s often no surprise to go for an entire day out and not have to reach for paper notes and loose change to pay for anything.

This extends to travel too. 

By 2017, 1 billion journeys had been made on the London transport network using contactless payments. It has rolled out yet further still, making it possible for people travelling to Gatwick Airport and other destinations by rail simply by tapping their payment card at a ticket barrier.

Contactless payments: What are the benefits? 

That flexibility alone is one of the major advantages of contactless – and why people could well be more likely to continuing using it as a payment method outside the Covid-19 restrictions.

Speed and convenience are also key selling points of contactless. It takes far less time to tap a card against a reader than placing it into a slot and then typing in your PIN.

And would you believe that contactless is also much more secure than chip and pin? It is due to the encryption technology used and extra measures put in place to stop the misuse of a card.

But one of these measures is arguably one its disadvantages. There is a limit on how much can be spent in one contactless transaction. While this has increased from £30 to £45 in light of the current restrictions to promote hands-free payment, anything above that requires a PIN.

The fact that contactless payments were becoming more popular with UK consumers before the Covid-19 lockdown is enough to suggest that people will continue with it once restrictions come to an end. But the Covid-19 public health challenge is pushing forward the use of contactless to new heights. And it’s difficult to see how this particular habit is one that will be rolled back.  

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