IBS Journal October 2016
07
Worldpay research predicts death of cash
research, this time from Worldpay. A new £5 polymer note entered circulation in the UK during September. But according to a survey by the payment processing company, involving 2,500 people, it could end up as a collector’s item as one in three Brits think cash will be obsolete in five years. A quarter of UK consumers claim to avoid shops that don’t take cards, while a third only use notes and coins if they absolutely have to.
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A year on from the increase in the contactless payment limit and 37% of shoppers told Worldpay they would like to see the ceiling rise again, allowing them to ‘tap and go’ on purchases over £30 – this rose to 45% of respondents in London. 33% of Londoners use contactless cards once a day, more often than any other region across the UK, no great surprise given the TfL roll-out.
The arrival of Apple Pay and Android Pay has spurred two thirds of 16-34 year olds to leave their wallets at home. Whilst across all age groups, 54% expect their smartphones to replace their card as the main method of payment within the next five years. James Frost, Chief Marketing and Commercial Officer at Worldpay, says: “The shift that we are seeing in terms of consumer preferences and what shoppers now expect from the High Street is seismic and paying with cash is an inconvenience for many of today’s shoppers. Whilst online stores have tended to changing expectations and delivered simplicity and flexibility through technology, physical stores are at risk of falling behind. From contactless busses to Waitrose’s first cashless store, the growing popularity of tap and go is a trend that
race yourselves for yet more ‘RIP cash’
all retailers will need to embrace or risk losing relevance.”
IBS Journal says: Time for a reality check…Cash will not be obsolete in five years. Anyone who believes that is living in la la land. In 2020, it will still be top of or close to the top of the payments pile because, contrary to what this research is telling us, many shoppers find it convenient to pay in this way.
Industry expectations about the future of mobile payments are not aligned with consumer attitudes, according to recent Compass Plus research. Almost 60% of industry experts believe that one day traditional wallets will be replaced by mobile wallets, however, when asked how they will pay in 10 years’ time, just 6% of consumers stated that their smartphone would be top dog.
The research took in the views of 150 consumers and 100 payments and banking experts. 42% of the former said they would continue to use multiple channels over the next decade. The survey also found the number of those issued with contactless cards had risen from 29% in 2014 to 62% in 2016. Yet despite receiving a card, 12% of people did not tap and pay – the majority of these were aged over 45. Cash remains the method thought of as the most secure (63%), whilst approximately a quarter of respondents flagged up mobile payments, online payment providers and contactless cards as the least secure.
Scott Thompson
www.ibsintelligence.com
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