IBS Journal July 2016
39
is interesting to note that Android Pay does not provide finger print security for any but its latest models, and this news is unlikely to put fearful customers at ease, given that stories of hacks and breaches in the payment world make headlines almost every day.
Only 2% claimed to use mobile pay on a daily basis and 83.8% highlighted their reluctance to adopt the payment method in the next 10 years. Likewise, only 9.9% claimed to use contactless debit or credit cards. Such statistics will come as a shock to those who predict that contactless will lead the way towards a cashless society in the foreseeable future. Until new technological payment methods refine these security-related concerns, their future growth may actually be stunted.
IBS Journal: Debit cards will take over from cash to become the UK’s most frequently used payment method in 2021, according to a new report from Payments UK. What is your response to that prediction?
EO: There is no denying that the prevalence of cash is being challenged by the rise of alternative forms of payment. As Payments UK and UKCA point out, by the end of March 2016 the number of debit cards reached 99.7 million and this rise stems, in part, from the growing migration away from ATM-only cards to debit cards. Consequently, cards are certainly providing consumers with the option to bypass cash.
Yet as Co-operatives’ report on consumer behaviour and shopping trends revealed, cash is still the preferred payment of choice for over 65% of all UK shoppers and it contributes to around half of all payments made in the UK. This volume is also increasing year on year. Coins and notes remain, as the Co-operative rightly highlighted, the ‘King of Convenience’, due to reliability and accessibility.
Modern life means we are now hybrid spenders. We have the option of different forms of payments for different occasions and whilst we enjoy finding a bargain online we also enjoy splashing the cash in shops. This is a good thing and is all about consumer choice. Whilst new electronic methods are making a stake in the transaction market, the popularity of cash remains strong. I therefore think it unlikely that debit cards will take over cash by 2021.
IBS Journal: Where do you stand on the rise of mobile payment services like Apple Pay and Android Pay?
EO: The use of mobile and wearable payment technology is certainly likely to precipitate the development of hybrid spending. In recent years we have seen the emergence of Apple and now Android Pay, even Fitbit devices are promising to unveil a payment feature.
These certainly have something to offer the global payment market. According to Statista, there are currently 4.61 billion mobile phone users worldwide and therefore the potential market for mobile technology is extraordinarily large.
However, we must not forget that mobile payments have not yet taken off on a mass scale. Our research reveals that, whilst UK baby-boomers, aged between 18 and 35, were the highest adopters of mobile pay, only 3.5% actually use it on a daily basis (compared to 2% of the whole population), and less than 5% of all our recipients said it would be their chosen payment method in the next 10 years.
For those that opt to use contactless, the majority still show a preference for tap and pay credit cards and therefore, whilst I do think that contactless credit cards will be slowly ousted by wearable and mobile payment technology, I believe this will take time because consumers have a preference for the tried-and-tested. Moreover, because mobile lies on the opposite end of the payment spectrum, I do not expect its development to undermine or replace cash usage.
IBS Journal: There is a lot of time and resources being pumped into the campaign to get contactless over with the general public. Is this frustrating for the likes of YourCash? It sometimes feels that the contactless message (sponsored by the banks and card schemes) drowns out the message that cash is
still very popular with consumers.
EO: There are certainly many unrealistic, optimistic and often inaccurate messages on contactless popularity circulating within the media, which of course suits the providers of technological payments (banks, card schemes, mobile providers) very well. I am constantly amused
www.ibsintelligence.com
Page 1 |
Page 2 |
Page 3 |
Page 4 |
Page 5 |
Page 6 |
Page 7 |
Page 8 |
Page 9 |
Page 10 |
Page 11 |
Page 12 |
Page 13 |
Page 14 |
Page 15 |
Page 16 |
Page 17 |
Page 18 |
Page 19 |
Page 20 |
Page 21 |
Page 22 |
Page 23 |
Page 24 |
Page 25 |
Page 26 |
Page 27 |
Page 28 |
Page 29 |
Page 30 |
Page 31 |
Page 32 |
Page 33 |
Page 34 |
Page 35 |
Page 36 |
Page 37 |
Page 38 |
Page 39 |
Page 40 |
Page 41 |
Page 42 |
Page 43 |
Page 44 |
Page 45 |
Page 46 |
Page 47 |
Page 48 |
Page 49 |
Page 50 |
Page 51 |
Page 52
