Contactless payments are on the rise but not everyone welcomes a cashless society

The value of contactless payments rose by 48.3% to €13.6bn with contactless accounting for 52% of all card payments in 2021, up from 25% in 2017.

Cashless payments surged during the pandemic as card spending reached record levels, according to new figures.

The value of contactless payments rose by 48.3% to €13.6bn with contactless accounting for 52% of all card payments in 2021, up from 25% in 2017, states a new report by the Banking and Payments Federation Ireland (BPFI).

As card-use increased, fewer people took out cash in 2021. ATM withdrawals fell from a peak of €19.9bn in 2018 to €12.7bn in 2021, the BPFI Payments Monitor Q4 report stated.

In December 2021 there were 3m contactless payments valued at €53.8m per day, up from 2.1m payments valued at €36.5m a year earlier.

Although card use is on the rise, a cashless society is not a welcome possibility for everyone, said policy advisor with Consumers’ Association Ireland Dermott Jewell.

“We do not live in a cashless society. It is not a policy envisaged for Ireland and for good reason,” stated Mr Jewell in a recent Irish Examiner piece.

“It is not, for example, in the best interest of customers who rely on cash payments to pay their way. This can be in the form of an allowance from a parent, a cash payment from an employer, use of cash from savings while unemployed or working from home and reluctance to queue in banks through Covid,” he said.

He also says a cashless society will directly impact charity workers who rely on donations through collection boxes.

Almost €70.7bn was spent through cards in 2021, up from pre-pandemic levels of about €57.2bn in 2019, according to Central Bank of Ireland data.

Remote and online shopping has increased as 53% of card spending in 2021 was done in stores, which is down from pre-pandemic levels of 61% in 2019. Some 36% of in-store spending was contactless which includes payments with cards as well as mobile wallets such as Apple Pay or Google Pay, up from 17% in 2019.

“With the majority of Covid-19 restrictions now removed we expect these changes in consumer behaviour, that were accelerated during the pandemic, will likely remain and drive a long-lasting shift in the use of digital channels and electronic payments,” said chief executive of the BPFI Brian Hayes.

Online and mobile banking continued to rise in 2021 with volumes increasing by almost 85% over the last five years. As consumers continued to reduce their reliance on cash and cheques, digital banking payment volumes increased by 10.4% to 131m payments in 2021. This was almost 85% more than in 2016, when only 71m digital banking payments were made.