It’s finally happened, not that it was ever in doubt. From the moment the contactless spending limit was hiked up to £30, it became a question of ‘How quickly?’ would the monthly spend reach the £1 billion milestone.
Contactless cards conquer all
Now we have our answer: three months. In just three months since the introduction of the higher spending limit, we jumped from spending £634m to £1.02 billion in a single month, according to new data from The UK Cards Association. By contrast, in January 2015, contactless spending amounted to just £287 million.
In October, figures showed that contactless cards made up 10 per cent of all card transactions and that the limit raise also led to the increase in the average value of a ‘touch-and-go’ payment from £7.35 in September to £7.72. In November, that number increased even more to £8.03.
“Spending on contactless cards has increased almost fourfold since the beginning of 2015 and for £1 billion to be spent via contactless in a month is a major milestone. Whether it’s buying lunch or paying for travel, there is a real appetite for contactless payments and this is only going to grow and grow,” said Richard Koch, Head of Policy at The UK Cards Association.
Nearly half of all UK credit and debit card transactions are processed by Barclaycard and it said that the value of contactless spend soared by 164 per cent compared to 2014 figures and volume also shot up 135 per cent, as consumers increasingly enjoyed the expediency of using ‘touch and go’ payments.
People are spending more during each transaction
Furthermore, just as the UK Cards Association registered a further increase in the average value of a contactless payment, so did Barclaycard with its customers. It said that the average amount Barclaycard customers spend in each contactless transaction has increased 26 per cent, to £8.65 , following the introduction of the £30 limit with more than a quarter (27 per cent) of active Barclaycard customers now using contactless each month.
London leads the tap-and-go charge
Unsurprisingly, London continues to blaze a trail in terms of contactless card usage, according to data from Barclaycard. Just over four out of ten (41 per cent) of all transactions valued £20 and under are now made using contactless cards in the capital. This is undoubtedly due to the integration of the technology in the city’s transport network, with contactless technology now representing 25 per cent of all pay-as-you-go transactions on TfL. This marked a huge jump from September’s data when contactless only accounted for one in seven TfL journeys.
Other cities making up the distance
However, other cities are closing the gap with the likes of Cambridge (26 per cent), Northampton (24 per cent), Bristol (23 per cent), Oxford (23) and Southampton (23) all having contactless make up around two out of ten of all transactions £20 or under. Of the cities sampled, Cardiff was joint bottom with Liverpool with 20 per cent.
“Every second counts for today’s busy shopper and as our data shows, ‘touch and go’ payments are now the norm for an increasing number of everyday purchases. Whether it’s grabbing a coffee on the way to work – or stocking up on groceries on the way home – the speed and ease of contactless means it’s now the preferred way to pay for shoppers across the country. As the old adage goes – ‘time is money’ and we expect contactless payments to continue to break new records throughout 2016,” said Tami Hargreaves, Commercial Director, Digital Consumer Payments at Barclaycard.
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