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CASH Farewell to cash?
With Android Pay launching in the UK, and debit cards rising to the top of the payments pile, Scott Thompson asks: could cash be on its way out?
headlines during May when it predicted that debit cards would take over from cash to become the UK’s most frequently used payment method in 2021. The Guardian headline, Cashless Britain advances as contactless and debit cards thrive, pretty much summed up the mainstream media’s response.
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Notes and coins were still the most popular method in 2015, accounting for 45.1% of all payments. However, it is predicted that by 2025 they will drop to being used for just over one in four payments. In 2021, 14.5 billion debit card payments are predicted, overtaking the cash forecast (13 billion) for the first time.
Payments UK also forecasts another landmark in 2025, when credit, debit and charge cards will account for more than half of all payments made (50.2%) – driven in large part by the increasing popularity of contactless. The average UK adult made 20 card payments per month in 2015, of which around one in 10 were contactless. By 2025 we are predicted to use a debit, credit or charge card virtually every day (30 times per month) and almost half of these transactions – 14 per month – will be contactless, with mobile playing an increasing role.
Certainly, the cashless brigade has been getting very excited about the arrival of Android Pay in the UK, labelling it a game changer. It becomes the first country outside the US to accept Android Pay, though the service is set to be rolled out in other territories over the next few months. Dave Hobday, UK Managing Director, Worldpay, commented: “With the roll-out of mobile wallets such
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rade association Payments UK made
as Android Pay and Apple Pay, we are likely to see an unstoppable rise in use as the technology spreads and penetrates every corner of the country.“
Not everyone has been blown away, however. Alain Falys, CEO, Yoyo Wallet, argued: “One of the giants have launched into the UK mobile payment market. However, like Apple Pay, Samsung Pay and a host of others before, Android Pay fails to deliver on the long promised payment revolution. Again we see mobile being used to deliver a mirroring of the traditional payment experience, missing the opportunity to go beyond payment and create real value for consumers and retailers.”
For all the hype around it, mobile payment remains a niche thing as many consumers don’t view it as a solution to a problem that plagues their everyday lives. The actual payment isn’t the thing here, it’s the proposition around it, but no one (not even the mighty Apple) has come close to cracking that yet. Also, the Payments UK prediction aside (and let’s remember it’s a prediction, this time last year many were claiming Apple Pay would go mainstream in 2016; it hasn’t), cash remains hugely popular with the man and woman in the High Street.
By way of example, the total value of LINK ATM withdrawals between Friday 29 April and Monday 2 May (aka the May Day bank holiday weekend) rose 7% from £1.603 billion to £1.716 billion, compared with the same period last year. It was the busiest ever May Day bank holiday weekend for the UK’s 70,270 ATMs.
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