Cash is fast-becoming the least attractive method of payment, according to the latest research from Visa Europe . And it says the wide-spread consumer adoption of mobile payments will grow faster than ever in the next five years, with six in ten Britons expecting to pay by mobile at least once a week by 20201.
As a result of this shift towards mobile payments, the Payments Council estimates there will be less cash in circulation. It forecasts that cash volumes will fall by as much as 30% over the next 10 years, as consumers move towards debit card, contactless and mobile payments2.
With a three-fold rise in the use of UK mobile payments in the next five years, retailers need to adopt the new technology. Jeremy Nicholds, executive director for mobile at Visa Europe, says that in the next 12 months mobile payments will undoubtedly become mainstream.
“The environmental conditions are already in place to meet the demands and expectations for digital payments. It’s no longer a question of ‘if’ consumers will embrace this new way to pay – it’s when,” he adds.
In its annual payments survey, the British Retailers Consortium, the BRC, echoed this message, saying that customers will increasingly expect to be able to pay in the way that suits them best. And that “considerable investment” from retailers will be necessary to meet the ever-changing needs of increasingly tech-savvy customers in the years ahead3.
As Helen Dickinson, director general of the BRC, acknowledges: “We're entering an exciting time for retail as technology continues to have a major impact on everything we do – this is just as true for methods of payment as it is for how products are sold.
“Meeting new demands from consumers, be it how and where they want to shop or how they wish to pay, retailers will need to innovate in order to continue to meet customer demand.3
Barclays entered the mobile payments market with Pingit which was launched in February 2012.
Paym is another innovation that enables people to send or receive money using just a mobile number. Payment happens within seconds and there is no need to share bank details5.
Many more new innovations have to be on the horizon as mobile-commerce options, digital wallets and contactless payments will all play an important part in day-to-day spending. The demand is clearly there, with 43% of shoppers saying they would be interested in using a mobile wallet service and nearly half (47%) interested in using their smartphone to make everyday contactless payments in a shop.
People who are already using their mobile devices to make transactions are also open to other mobile money services. The research highlights that these ‘mobile money’ users are five times more likely to be interested in paying friends through a smartphone app compared to non-users (48% vs. 9%). Plus one in five would be open to social media payments too, compared with only one in 20 non-users.
Convenience wins over concernsHowever, not everyone is as keen to embrace the new pay by phone technology. A third of respondents admitted they simply didn’t know enough about it, and as with other new technologies, there is some apprehension about issues like privacy, fraud and security.
However, as Mr Nicholds says, that’s understandable: “When it comes to money, concerns over control and security are understandable though a simple lack of knowledge is often an underlying cause, and consumers are quick to see the benefits of convenience.
“We’ve seen this with contactless card adoption – once people learn about the technology, see others using it and get used to paying with it, usage soars.”
Barclaycard has put safeguards and consumer protection in place. Security measures from Barclays and Barclaycard include one secure log-in for all apps, PINsentry when banking online or on your mobile device, free security software.
There is also a Mobile and Online Banking Guarantee. This means that anyone who becomes an innocent victim of fraud, when using any Barclays Mobile Banking service, will get a refund of any money that is taken from their account. Find out more about the Online and Mobile Banking Guarantee.
1 Mobile Money report from VISA Europe, conducted between 30 April and 20 May 2015 in six European countries: Finland, France, Germany, Poland, Spain and the UK. The total sample size was 12,015 consumers, approximately 2,000 respondents per country. https://visaeurope.com/media/pdf/24087.pdf (28KB)