The overall decline in payments during this crisis has been partially offset by a rise in online spending, but non-essential spending plummets, according to GlobalData’s statistics. Several prominent retailers have temporarily closed their stores and moved to online-only sales, and online payments solutions, such as Paypal, Visa checkout and Masterpass, stand to benefit from the trend.

GlobalData’s updated report, ‘COVID-19 Sector Impact: Payments’, shows that the value of online transactions is expected to rise at an annual rate of 13.1% in 2020, compared to the previous rate of 9.4%. Both e-commerce and m-commerce is expected to show strong growth up to 2023f, and higher than in the company’s pre-COVID-19 forecasts.

GlobalData Banking and Payments Analyst, Ravi Sharma, commented: “As the UK gradually eases its lockdown restrictions and precautionary measures such as social distancing, consumer spending is expected to gradually increase in the coming months. The overall decline in payments has been offset by a rise in online spending as consumers stay at home and use online channels to purchase goods.”

The pandemic has also fanned public concerns that the virus could be transmitted by cash, and its usage is therefore expected to stay suppressed over the coming months. “Many shops are now refusing cash and asking customers to pay using electronic methods. Customers are also switching to digital and contactless methods out of choice. The recovery of card usage is expected to be faster towards the end of Q2 2020, when some lockdown measures are lifted,” Sharma concluded.