June 12, 2016
Remember when people used to carry cash? According to The Payments Council (UK), 2015 saw the first year where contactless payments (debit cards, mobile payments and contactless cards) have overtaken the use of cash, which made up just 45.1% off all consumer payments.
There were more than a billion contactless transactions carried out in 2015, not surprising when you consider that there are over 97 million contactless cards issued in the UK. Though, undoubtedly a huge factor in the continued growth in the use of contactless cards is the increase in the number of businesses utilising contactless card payment technology.
There has also been a huge increase in the number of consumers aged 60 and over who are using ‘touch and go’ payments. Figures from Barclaycards Contactless Spending Index show an increase of 116% over the last 12 months for there so called ‘silver surfer’ age group.
The introduction of Android Pay, along with smartwatches and other wearable tech that can process payments taking greater hold in the market, means that it is possible that we could see the figure of cash being used for 25% of payments within a decade being overtaken a lot sooner than we think.
For example, back in May 2016, we saw the release of Android Pay, an NFC (near field communication) system similar to Apple Pay that is already available in almost half a million places throughout the UK including McDonalds, Greggs and KFC; some of the Britain’s largest retail chains.
The significance of this is that while Apple Pay has been available since summer 2015 the Android alternative has, until now, only been available in the US. With Android having a 60% share in Great Britain’s smartphone market, there is huge potential that this could be another tipping point in the use of contactless payment technology, similar to the one after Transport for London allowed contactless cards to be used on the city’s transport system.
It’s not just mobile tech that is fueling the decline in the use of cash, the growth in the availability of self-service checkouts and kiosks has also played a large part. Now a common sight in high street retailers and supermarkets, these payment kiosks are able to process both cash and card payments. Recently however retailers have been choosing to include NFC and contactless card options to their self-service checkouts to adapt to an increasingly tech savvy consumer base.
What this shows us it that both consumers and businesses are open and willing to embrace new payment technologies that can make their daily lives and operations more convenient and efficient.