When it comes to making in-store payments more convenient for customers, contactless payments are set to be the way to go.
The promise of being able to make a payment quickly without having to enter a PIN or signature is hugely appealing to consumers, and in turn, this benefits retailers as well.
Therefore, the popularity of this technology is continuing to rise. This is particularly true in the UK, where the introduction of a higher limit for payments has contributed to a significant boost in the number of contactless transactions.
Consumers embracing contactless
In September last year, the spending limit for contactless transactions in the UK increased from £20 to £30. And according to new figures from Visa Europe, there’s been a clear appetite for the higher limit, as the total number of contactless transactions has since increased by 237 percent year-on-year.
Between October 2015 and March 2016, contactless transactions worth over £20 saw an average monthly growth rate of 19.1 percent – over twice the figure for transactions under £20 (eight per cent month-on-month).
More than 36 million contactless transactions over £20 were recorded in the first six months since the limit was raised, amounting to nearly £900 million of consumer spending.
This is likely to be very good news for merchants, as Visa Europe’s research identified several key areas where the impact of contactless is changing consumer behavior.
In supermarkets, for instance, the average basket value stands at around £25, making it an ideal candidate for contactless with the higher limit. And consumers seem to agree, as Visa’s data shows a 100 percent increase in contactless transactions compared to the six months before the threshold was raised.
Other sectors benefiting from the change include restaurants, where contactless spending has increased by 155 percent; service stations; and bars and pubs.
Kevin Jenkins, managing director for UK and Ireland at Visa Europe, said: “The trajectory for contactless payments continues to look very strong. Increasing the spending limit to £30 has clearly encouraged consumer adoption and retailer opportunity across Britain … The increase has driven a demonstrable shift in consumer behavior.”