Prior to the pandemic, the U.K. saw a rapid adoption of digital payments as consumers grew comfortable with shopping online. However, COVID-19 speeded up the digitalization of the entire payments industry during the lockdown, with millions of consumers choosing online payments over cash and ATMs, according to a press release.
Data presented by BuyShares.co.uk shows the number of ATMs in the U.K. plummeted to 55,000 in December 2020, showing a loss of almost 6,000 ATMs within a year.
Transaction plunged by 30% during pandemic
Social distancing and the COVID-19 lockdown led to a huge number of closed ATMs in the first quarter of 2020. In January, there were approximately 60,500 ATMs in the U.K. as revealed by the U.K’s Cash Machine Network, LINK, report. In the next three months, this figure dropped to 53,100.
Statistics indicate a large number of ATMs remained shut down even after the authorities lifted off restrictions. In September 2020, 55,600 cash machines were in use across the country, but by November lockdowns caused ATM numbers to fall once again to 54,754.
Besides a considerable drop in the number of ATMs, LINK transaction volume and value also plunged amid the coronavirus outbreak. In January 2020, consumers withdrew £8.18B ($11B US) for a total of 185 million transactions. By the end of April, the transaction value dropped by 46% to £4.39B ($6.1B US) while the number of transactions halved to 91 million.
The ATM use increased through the early summer as the authorities lifted off many restrictions. Statistics show the number of transactions peaked at 141 million in August while total transaction value hit £7.1 billion ($9.8B US) that month.
The tightening of restrictions in October and November again caused a massive drop in ATM use, although not as much as the first lockdown. Statistics show Britons withdrew just over £6B ($8.3B US) in 188 million transactions in November, a 43% plunge in a year. Although these figures rose to £7B ($9.7B US) and 129 million in December, it still represents a 34% year-over-year drop. Overall, 2020 saw LINK volumes fall by 37% and transaction values by 30% year-over-year.
Use of cash drops, digital payments rise
As the use of cash continues to drop amid the ongoing coronavirus lockdown, digital payments in the U.K are set to reach a new record.
According to a Statista survey, the U.K., as the leading digital payments market in Europe, is expected to hit $271.4B ($377B US) value in 2021, almost a 25% increase in a year. Statistics show cashless payments in the U.K. jumped by 40% amid the COVID-19 outbreak. By 2025, their transaction value is forecast to jump by another 60% to $439B ($610B US).
As the largest segment of the market, digital commerce is expected to reach $172.8B ($239B US) transaction value in 2021 and continue rising to $219.2B ($304B US) in 2025.
Mobile POS payments are forecast to witness a 123% increase in this period, with their transaction value jumping from $98.5B ($136B US) in 2021 to $219.9B ($305B US) in 2025.