40% of UK consumers say they won’t use cash in 10 years’ time
Four out of ten people (43 per cent) have said that contactless payments are the future, whilst a quarter believe that cash won’t be used to pay for goods or services in just five years.
The research, conducted by Lloyds Bank, comes as new figures reveal that people spent £2.5 billion via contactless cards in the first six months of 2015. That number is bound to be surpassed much quicker in next year’s first six months as the contactless payment limit has just been raised from £20 to £30.
Payments 10 years down the line
Lloyds’ research revealed that traditional cards such as debit and credit will still have a future in 2025 as 63 per cent of respondents said they expect to use them in day-to-day transactions.
Over half of respondents (52 per cent) still believe they will be using cash for everyday transactions.
Just under half of people (48 per cent) have said that they will use contactless cards on a daily basis.
Over a quarter (27 per cent) believe they will make payments with watches or wristbands and one in five (22 per cent) is ready to embrace biometric technology and make payments using his or her fingerprint.
What does this research mean?
On the whole it reveals that the UK population is very ready to adopt innovative payment technologies. That is not surprising given how readily the country has adopted contactless payments over the last couple of years. A small group of people (7 per cent) actually went as far as to say they expect to be making payments via a microchip embedded in their bodies!
What is surprising is the people’s conviction that they will be using debit and credit cards more than any other payment method – even more than contactless cards. Given how quickly contactless payments have evolved, to then see that two-thirds of the population still believe they will be using debit and credit cards more than any other method shows there is still some work that needs to be done to encourage contactless adoption.
One explanation as for why traditional methods of payments still come out top is perhaps because they are just that– traditional. People are used to them; compared to cash and credit cards, contactless technology looks like a new-born baby.
As the years pass contactless technology will evolve and the payment limit will be raised even higher meaning people’s perceptions and payment behaviours will change at a much faster pace.
What about mobile?
With Apple Pay being less than two-months-old, it’s not surprising that only a relatively small amount of people see themselves using mobile payments in the imminent future.
Just over a third (34 per cent) of respondents said they expect to be using mobile devices to make everyday payments in the next five years.
However, the more significant statistic is the 47 per cent who say that they don’t feel mobile will ever be a main method of paying for goods or services.
Security seems to be the main reason for people’s reticence. A similar number (44 per cent) said that they do not believe mobile payments are secure or safe enough.
Another reason is the lack of the appropriate device, with 18 per cent saying their phones actually lack the mobile payment capabilities.
Where does this leave cash?
In a peculiar place is the answer. Lloyds’ research showed that 52 per cent of people actually see themselves using cash on a day-to-day basis by 2025!
That seems a very odd statistic considering how the rest of the data suggests the UK population is hungrily anticipating new payment innovations.
However, it may be misleading because a quarter of people actually said they believe cash will no longer be needed to pay for goods or services within five years. That figure jumps up to 39 per cent by 2025 and 48 per cent within 20 years.
It should also be borne in mind that it is only this year that the Payment Council revealed that cashless payments have overtaken cash ones, suggesting that in the very near future people’s perceptions may differ significantly as we move past the tipping point.