A total of 40.4 billion payments were made by consumers and businesses across the UK in 2021, new figures published by UK Finance have revealed.

The total marks a return to pre-pandemic payment volumes following a significant fall in 2020 due to the COVID-19 lockdowns.

As the economy reopened, payment trends reverted towards their long-run patterns, with card payments increasing and cash payments continuing to fall.

The number of debit card and credit card payments climbed to 22.9 billion in 2021, to account for 57% of all payments made in the UK. Debit cards remained the most common payment method, after growing by over 23% to reach a total of 19.5 billion payments. UK Finance said that the growing popularity of debit card payments has been a “key feature” of the last decade, and appears set to continue in the future.

Contactless payments – including payments initiated using contactless cards, mobile phones and watches – are continuing to grow in popularity. According to the banking body’s data, almost a third of all payments in the UK were made via contactless methods in 2021, a figure up 36% compared with 2020.

This came as the number of cash payments decreased by 1.7% to total six billion payments, although it still remained the second most commonly used payment method, after accounting for 15% of all payments made in the UK last year.

UK finance stated that it is expecting cash usage to continue to fall and added that by 2031, cash will account for just 6% of all payments made in the UK. Rather than the UK becoming a cash-free society over the next decade, UK Finance believes the country will transition to an economy where cash is less important than it once was, but remains “valued and preferred by many”.

“Payment trends generally tend to change slowly, as we all form habits about the way we pay for things and these don’t change easily,” said UK Finance head of research, Adrian Buckle, commented. “However, the pandemic accelerated the pace of change in 2020, in particular the reduction in the number of cash payments.

“In 2021 we saw the total number of payments return to pre-pandemic levels and a return towards the long-run trends in payment method usage. Contactless continued to be popular, accounting for almost a third of all payments.

“Cash usage fell slightly, although remained the second most commonly used payment method. These are trends we expect to continue over the next decade, alongside a continued decline in cheque use, and an increase in the number of people using remote banking.”

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