‘Cheque’ this out: Card and online spending rises as cheques hit new low.
Online and mobile banking continued to surge ahead in 2021 with volumes increasing by almost 85% over the last five years according to the latest Payments Monitor Q4 2021 from Banking & Payments Federation Ireland (BPFI).
The report also shows total card spending reached new heights in 2021 as consumers and businesses reduced their use of cash and increased their online spend and contactless payments in stores.
“In just five years we have seen an unprecedented jump of 85% in online and mobile banking payments as consumers continue to adopt to digital channels and move away from paper-based payments”
As consumers continued to reduce their reliance on cash and cheques, online and mobile banking (digital banking) payment volumes grew by 10.4% to 131m payments in 2021. This was almost 85% more than in 2016, when only 71m digital banking payments were made.
The report show that consumers are making greater use of electronic channels in place of paper-based payments in particular.
Cheques reached a new low in 2021 at only 20m payments, down 14.7% on 2020 and less than half the volume in 2017. Direct debits, which are mainly used for bill payments, grew by 0.7% to 139 million in 2021.
Increasing dependence on mobile wallets
The Monitor, which also captures contactless data, shows contactless payments accounted for more than half (52%) of all card payments in 2021, up from 25% in 2017.
In value terms, about 53% of card spending was in stores, down from 61% in 2019, while some 36% of in-store spending was contactless which includes payments with cards as well mobile wallets such as Apple Pay or Google Pay, up from 17% in 2019.
The report also shows the volume and value of contactless payments rose by 36.5% and 48.3%, respectively, year on year in 2021 to 834m payments worth €13.6bn. This was more than double the value in 2019. In December 2021 there were 2.99 million contactless payments valued at €53.8m per day, up from 2.1m payments valued at €36.5m a year earlier.
In total almost €70.7bn was spent on cards in 2021, up from about €57.2bn, in 2019, according to Central Bank of Ireland data. By contrast, cash withdrawn at ATMs fell from a peak of €19.9bn in 2018 to €12.7bn in 2021.
“Our latest payments figures which allow us to assess 2021 as a whole, very clearly demonstrate the continued momentum driving the use of digital banking as well as contactless payments and card spend more generally,” said Brian Hayes, CEO of Banking and Payments Federation Ireland.
“In just five years we have seen an unprecedented jump of 85% in online and mobile banking payments as consumers continue to adopt to digital channels and move away from paper-based payments.
“Similarly, as the move away from cash continues and ATM usage falls, consumers are increasingly choosing instead to spend online or to use contactless cards when shopping in store. The downward decline of cheques continues, reaching a new low of 20m payments last year, just 15% of the total volume of digital payments.
“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,” Hayes said.