A new Worldpay survey of UK consumers confirms that half of those polled have used a contactless method to pay for goods at least once, with 40% of respondents opting for contactless payments a few times a week.
According to Ben Lobel of SmallBusiness, the survey also found that the advent of Apple Pay and Android Pay has prompted two thirds (67%) of 16-34 year olds to pay with their smartphones instead of cash or plastic. Perhaps not surprisingly, 54% of UK consumers expect their smartphones to replace cards as the primary method of payment within the next five years, while one third believe cash will become obsolete by 2020.
“‘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,” James Frost, chief marketing and commercial officer at Worldpay, explained. “While 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 all retailers will need to embrace or risk losing relevance.”
It should be noted that the above-mentioned Worldpay study was published just a few short months after a similar survey conducted by London & Partners found that nearly three quarters of those polled in the capital city believe digital transactions will replace traditional bills and coins by 2036.
“[Both] MasterCard and Visa have reported big rises in the number of contactless card payments, fueled by the use of smartphone payment apps,” reported Mark Blunden of the Evening Standard. “Contactless cards are used for about one in every 10 payments in the capital and Visa predicts that by 2020 about half of all transactions by Londoners will be on mobile. [In addition], MasterCard said contactless spending in the UK had more than tripled in the past year.”
According to the UK Cards Association, the increase in contactless card popularity can be attributed to a number of factors, including the growth of contactless transport ticketing and an increase in the payment limit to £30.
“With the amount spent using contactless cards almost trebling between 2014 and 2015 and the payment limit increasing to £30, it is clear 2015 was the year contactless went mainstream,” Graham Peacop, Chief Executive of The UK Cards Association, explained. “Whether buying a sandwich on the go, or paying for a round of drinks or a tube journey, contactless has become the default way people choose to pay for every day shopping.”
In addition, says Peacop, retailers are moving away from simply offering a traditional high street experience to embrace e-commerce and innovative ways of taking payments.
“At the same time, consumers are increasingly using their cards, and especially their contactless cards, for smaller and smaller purchases. With such convenience and flexibility, payment cards will continue to play a central role in the future,” he added.