As the UK economy reopened, payment trends reverted towards their long-run patterns. Card payments increased and cash payments continued to fall. A total of 40.4 billion payments were made by consumers and businesses in the UK during 2021, which represented a return to pre-pandemic payment volumes after a significant fall in 2020 due to the Covid-19 lockdowns.
The number of debit card and credit card payments, which declined in 2020, rose again in 2021 (to 22.9 billion payments), which accounts to 57 per cent of all payments made using cards.
Debit cards remained the most common payment method, growing by over 23 per cent to reach a total of 19.5 billion payments. The growing popularity of debit card payments has been a key feature of the last decade, and this appears set to continue in future.
Contactless appears to be popular with consumers, due to the speed and security of transactions. The increase in the contactless payment limit (to £45 in April 2020 and then to £100 in October 2021) expanded the range of purchases that could be made this way. Retailers also encouraged the use of contactless during the pandemic as a way of helping to facilitate social distancing in shops. Card acceptance devices have also become more widespread in recent years, especially among smaller businesses.
The number of cash payments decreased by 1.7 per cent to 6 billion, although it remained the second most commonly used payment method, accounting for 15 per cent of all payments made in the UK last year.