A new survey conducted by London & Partners has determined that nearly three quarters of those polled in the capital city believe digital transactions will replace traditional notes 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,” reports 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.”
It should be noted that the above-mentioned survey was published just weeks after a report from the UK Cards Association confirmed a significant increase in the use of contactless cards. To be sure, £7.75bn was spent using contactless cards in 2015 – representing a massive jump from £2.32bn in 2014.
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.
As a recent LondonLovesBusiness article notes, London’s status as a leading financial center and technology hub has helped the UK to become a global leader for financial technologies. More specifically, the UK’s fintech sector generated £6.6 billion in revenue last year, while attracting approximately £524m in investment.
Perhaps not surprisingly, the Bank of England outlined plans for its own fintech accelerator program earlier this month, with governor Mark Carney stating that financial technology companies will change the very nature of money itself.
“[They will] shake the foundations of central banking and deliver nothing less than a democratic revolution for all who use financial services,” said Carney.