Contactless payments surge as use of cheques hits new low

The value of contactless payments rocketed 48.3 per cent in 2021, while use of cheques hit a new low, according to figures from Banking & Payments Federation Ireland (BPFI).

The industry body said online and mobile banking payments increased 10.4 per cent to 131 million last year, and have now swollen by almost 85 per cent over the past five years.

Consumers continue to reduce their use of cash and increase both their online spending and use of contactless payments in physical stores, it said.

As a result, the value of contactless payments surged to €13.6 billion, while the volume of such transactions was up 36.5 per cent year-on-year at 834 million. More than half of all card payments, or 52 per cent, were contactless last year, up from 25 per cent in 2017.

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Some 36 per cent of in-store spending is now accounted for by contactless payments, which includes mobile wallets such as Apple Pay or Google Pay, with this figure up from 17 per cent in 2019.

About 53 per cent of all card spending took place in physical stores in 2021. This has dropped from 61 per cent in 2019 as a result of online shopping taking a greater share of spending.

In total, almost €70.7 billion was spent on cards last year, up from €57.2 billion in 2019, according to Central Bank of Ireland data.

Cash and cheques

As consumers made greater use of digital payment methods, paper-based payments declined further.

Cash withdrawn from ATMs has fallen to €12.7 billion, down from a peak of €19.9 billion in 2018.

Cheques reached a new low in 2021, with a volume of 20 million such payments, down 14.7 per cent on 2020 and less than half the number seen as recently as 2017.

Direct debits, which are mainly used for bill payments, grew just 0.7 per cent to 139 million in 2021.

"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 BPFI chief executive Brian Hayes.