During 2023, 18.3 billion contactless payments were made in the UK, with one-third of adults using mobile contactless payments at least once a month

UK Finance released its latest Payment Markets Report, produced jointly with Accenture. It presents an overview of payment trends for the UK in 2023 and gives forecast projections for the next decade.

According to the report, the total number of payments made in the UK last year increased by 5% to 48.1 billion, with 38% (18.3 billion) being contactless. Notably, the number of contactless payments in the country grew by 7% in 2023. The most significant surge was observed in mobile contactless payments which are now used by 42% of the adult UK population, up from 30% in 2022.

One-third (34%) of adults used mobile contactless payments at least once a month last year. Unlike contactless payments made using a physical card, those do not have a ￡100 cap on the maximum amount of an individual payment and leverage additional security features, such as biometric authorisation.

Almost four out of ten UK adults (39%) were mainly relying on cashless transactions during the reported period. At the same time, cash still accounted for 12% (6 billion) of all payments made in the UK during 2023. Moreover, the number of people mainly using cash rose to 2.6% of the population, up from 1.7% in 2022.

Considering that mobile phone penetration is above 90% in the UK, UK Finance suggests that mobile contactless payments will continue to increase in usage. However, this may not reflect in a rapidly growing share of contactless payments, as the organisation expects this increase will mainly happen via a migration of payments from contactless cards to mobile contactless devices.

Debit cards remain the most popular payment method in the UK, accounting for 51% of all payments made in 2023. Cash is second in popularity, although the volume of cash payments made during 2023 fell by 7%. Notably, the use of card payments grew for lower-value payments focused on consumer retail card spending. Since local small businesses are increasingly accepting card payments, the transition from cash to card and mobile is expected to continue gradually.

The report also observes a shift in spending data over recent years, with a greater number of transactions each worth a lower individual amount. This trend is caused by the increased number of shopping trips, the transition to a hybrid working model, the use of multiple bank accounts, and the growing use of Buy Now Pay Later (BNPL) services. In 2023, against the backdrop of the cost-of-living crisis, the use of the Buy Now, Pay Later (BNPL) service sharply increased in the UK.