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Q & A Standing up for cash
Ewan Ogilvie, Managing Director of YourCash Europe, puts the case for notes and coins in a digital world
Interview by Scott Thompson
cards reached £1.5 billion in March, the first time this has happened in a month, according to The UK Cards Association. The UKCA says this ‘dramatic’ rise shows that paying with contactless is now second nature for millions of consumers. Fair
I comment?
Ewan Ogilvie: In an ever-increasing digital world, the growth of mobile payments is inevitable, and this is reflected in the statistics you mention. As the UKCA has revealed, UK contactless card spending increased by almost 250% during March 2015, compared to the same month in the previous year. Likewise, according to Visa Europe, European customers used their contactless cards 250 million times during April alone, clocking in at an average of 140 transactions per second. It is thus proving to be an undeniable alternative to coins, paper and plastic.
Yet a recent poll undertaken by YourCash and OnePoll, which surveyed 1,000 Millennials, Generation X and baby boomers on their attitudes surrounding current and future payment methods, offers an intriguing contrast to the data and claims produced by the UKCA. It highlights several popularity and security-based limitations.
Of those questioned within the survey, a mere 9.90% claimed to use contactless spending on a daily basis, whilst 39% said that they relied on cash each day. This suggests that, whilst the popularity of contactless is growing within the UK, it is still in its infancy and certainly not challenging the dominance of cash. Moreover, the data challenges the recent predictions from Payments UK that contactless stands to oust cash by 2021. Indeed, only 17% of recipients in our survey believed that they would still be using it in 2026, and many expressed the view that it was simply a fad.
www.ibsintelligence.com © IBS Intelligence 2016 Ewan Ogilvie
Therefore, whilst we will see the coming of age for many new payment technologies, we must not over-estimate its impact. To date, contactless spending does not seem to be ‘second nature’ for millions of consumers, and the contactless card accounts for only one in every seven transactions within the UK, as Payments UK’s own report conceded. It is, therefore, unlikely to throw cash onto the scrap heap anytime soon.
IBS Journal: Could you give some more details on the research you mentioned?
EO: Our research indicates that consumer skepticism on contactless cards and mobile transactions, such as Apple and Android Pay, is limiting development. Only 18.7% of those surveyed would chose to use new technological payments over cash or card. This is because, compared to cash transactions, contactless was considered by the majority of spenders to be more complicated to use, difficult to keep track of and defrauded easily.
In terms of mobile pay, the majority of respondents expressed concern in regards to how secure the payment method would be for larger transactions. Indeed, with the rise of the maximum contactless spend to £30 there is certainly the risk that criminals will chose to target it for an easy payday. Moreover, it
BS Journal: UK spending on contactless
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