Following news earlier this month that five of the UKs leading banks are set to offer users of their mobile banking apps the ability to make payments to friends and retailers, new research from Mintel reveals just how keen today’s consumers are for a cashless society. Indeed, highlighting demand, 18% of Britain’s internet users say they’d prefer to be able to stop using cash altogether. Meanwhile, just over a quarter (26%) of all Brits are undecided on the same issue – showing perhaps they may at least be open to the idea. Furthermore, just under two in five (38%) Brits are interested in being able to make mobile payments – with an enthusiastic 8% of the nation claiming they would apply for it straight away. Toby Clark, Director of Research, EMEA at Mintel said: “A major shift in consumer attitudes and behaviour towards payments is on the horizon. Even though overall interest in using mobile payments has declined recently, the integration of mobile phones into payments has only just begun. As mobile payment and wallet services become more widely available, and more intuitive and efficient to use, it will be difficult for consumers to resist adopting them.” “While just 8% of Brits claim they would apply for a mobile payment system straight away, across an adult population of around 4 million people, that still represents a potential user base of 20 million people: there is a huge market out there if providers are able to come up with a product that represents a tangible upgrade to existing technology.” And it seems that if a cashless society is to ever arise in Britain, it will start in London, as the research finds as many as 30% of Brits living in the capital would be happy to stop using cash altogether, by contrast, this declines to just 13% of those living in the South West and Wales and and 14% of those living in the North and Scotland. “The fact that Londoners are most comfortable with a cashless society reflects the region’s head start on the rest of the country in terms of payment system infrastructure and that new payment technologies, such as contactless cards, tend be launched in London first. However, there are huge swathes of the population which remain attached to cash, and the reality is that cash still has a long life ahead of it.” Indeed, while a substantial number of Brits are ready to call it a day with notes and coins, cash continues to be the most widely and frequently used payment method in Britain. Today, some 99% of Brits use cash, and only debit cards come close to rivalling it – just 2% of Brits say they have never used a plastic card. “It is not about any one payment method. People use multiple payment technologies, and if they can see a clear reason for changing their habits then they are willing to incorporate new ones, such as PayPal. Use of a particular payment method is largely determined by context. Cash dominates for small transactions on the high street, but for online and for high value transactions, debit and plastic cards are the payment methods of choice.” says Toby. Overall, since Mintel last explored consumer payment preferences in April 2012, the percentage of adults who say they own a card has risen from 19% to 32%, while the overall proportion who have used the cards to make a payment has risen from 5% to 13%. What’s more, a greater proportion of people who have a contactless card have actually used it, rising from 25% to 39% since the last study. And while it is early days, it is the nation’s youth that are leading the way in new payment forms. Under-35s are considerably more likely that the over-35s to have used Barclay’s peer-to-peer mobile payment system Pingit (22% of those aged 25-34 have used Pingit compared to 5% of those aged 45-54), meanwhile, about 17% of 25-34 year olds have used the virtual currency Bitcoin at least once. However, despite the growing popularity of contactless payments, it seems consumers are particularly sceptical about the security of newer payment technologies, with the level of concern shown about using mobile payments (65% of consumers show some concern) or contactless cards (61% consumers show some concern) nearly twice that displayed over using standard debit (34%) or credit cards (33%). Conversely, this fear of the new is less obvious when it comes to using non-bank payment services, such as PayPal, which protect users’ financial data from being seen by third parties. People actually show less concern about using these services than they do credit or debit cards – just 27% of internet users are concerned about using non-bank payment services (eg PayPal). Less than three in 10 (28%) have been a victim of fraud during the past five years, and most of the reported fraudulent activity occurs in areas where consumers generally benefit from a high degree of protection – card and online banking fraud. The top three areas of fraud experienced are card fraud (16%), fraudulent online banking (8%) and theft of cash (6%). “Payment fraud is an issue of top concern that often makes people hesitant about adopting new payment methods. However, from the consumer’s point of view, the actual chances of it happening, as opposed to the perceived fears, are overblown.” says Toby. Finally, while for many a cheque book might seem like a thing of the past – as many as two in five (41%) Brits have used a cheque in the past few months – however, three in ten (34%) under 35s have never even used one, a figure that rises to 49% of under-25s. “Even though the extinction of the cheque has been a drawn-out process, the conclusion may come swiftly as the generation that has grown up without writing cheques comes of age.” Toby concludes. You might also be interested in: No related posts.