Payment Trends: Contactless, Mobile and More
First launched in 2006, there’s no doubt that the use of contactless payments were initially slow to take off, with both businesses and consumers feeling wary of how they would work. But fast forward 11 years, and contactless payments have completely transformed the way that we purchase and pay for things! The real turning point came earlier this year when card payments overtook cash for the first time, with contactless accounting for a third of all card payments.
This week, we take a more detailed look into how contactless payments have evolved and how they could become the preferred choice for consumers to pay:
Security concerns have had a sizeable impact on consumer attitudes towards contactless payments, which could account for the slow adoption of the payment method. However, with more and more large vendors accepting contactless payments, and Barclays championing their wearable contactless gadgets, support for contactless payments is just as strong as it is for the traditional chip and pin. And with users only being able to spend £30 at a time, and layers of fraudulent measures in place, consumers are now feeling much more at ease.
These changing attitudes and spending habits also mean that shoppers are carrying less cash than they were before. According to recent statistics from IT Pro Portal, the average Brit has just £32.54 in cash in their purse or wallet right now – and the average transaction in the UK is £18.42 which means we’re not carrying enough for even two typical purchases.
Part of this neglect towards cash could also be down to how consumers feel towards it psychologically; as London Business School professor, Niro Sivanathan, recently claimed that parting with cash is “psychologically painful”, but that paying for items with a contactless card “anaesthetises the psychological pain that accompanies payment, seducing us into splashing out”. But equally, it could simply be that cash has begun to feel dated.
A Matter of Convenience
Both businesses and consumers are always on the lookout for ways to save time - and going contactless saves around 7 seconds per transaction! It also eliminates the added step of entering a chip and pin number or looking for your wallet at the till. Although this only saves a few seconds, it’s still enough to meet the demands of an increasingly fast-paced lifestyle where convenience and ease remain top priorities.
This contactless benefit is further supported by research from new card reading tech Square, which shows that one in six Brits is now a card-only shopper. Plus, a further two in five people would describe themselves as “card-first”, and would typically try to pay with a card, or mobile technologies like Apple and Android Pay, before having to pay with cash.
And it’s not just contactless card payments that have gained popularity, but also contactless mobile payments, which involve attaching your credit or debit card to your mobile and using your fingerprint to activate a payment mechanism.
As well as Apple Pay being more widely accepted and used in a range of outlets and countries across the world, there was also the launch of Android Pay in 2016 and Samsung Pay earlier this year. With more technological advancements on the way, and the aim of eliminating the need to carry a card, mobile payments are definitely one to keep an eye on.
More Businesses On Board
There are still three million businesses in the UK who don’t accept cards. However, this number is getting smaller and smaller as more businesses realise they need to offer contactless as an option to keep up with competitors and ensure the return of the modern consumer.
This is supported further as one in four shoppers said that they haven’t bought something at all, simply because they couldn’t pay with a card; proving that missing out on sales is a very real issue that’s impacting small business owners.
Although retailers seem to be the main adopters of contactless payments, other sectors are also keen to get on board. An example of this is black cabs, who started accepting contactless payments in London last year. This sort of behaviour could become more widespread and soon adopted by tradesmen (such as plumbers and electricians) or market stall traders, many of whom have already begun with the use of portable processors such as iZettle and Square.
So is cash set to become a thing of the past? Despite the recent developments, it’s still hard to imagine living in a completely cash-free world. However, Sweden is expected to become the world’s first truly cashless society, with experts predicting that we could be completely cash-free by 2030. And with the rate that it’s catching on, what started as an emerging trend looks set to stay and completely revolutionise the way we make payments!