Payment Methods - Ireland - October 2020

OVERVIEW
Key issues covered in this Report
COVID-19: market context
Products covered in this Report
EXECUTIVE SUMMARY
The impact of COVID-19 on payment methods
Figure 1: Expected impact of COVID-19 on payment methods, short, medium and long term, 19 October 2020
The market
Economic contraction to hit spending, affecting payment method usage
COVID-19 worries affecting payment and buying behaviour
Card payments and credit transfers on the up, cheques in decline
Who’s innovating?
The consumer
Debit cards (contactless) now the most used in-store payment method
Figure 2: Payment methods used in-store in the last month, NI and RoI, August 2020
PayPal and debit cards most common methods for online payments
Figure 3: Payment methods used online in the last month, NI and RoI, August 2020
Speed and security the priorities for low-value purchases
Figure 4: Most important factors ranked in order of importance when deciding which payment system to use for an everyday, lower-value purchase, RoI, August 2020
Figure 5: Most important factors ranked in order of importance when deciding which payment system to use for an everyday, lower-value purchase, NI, August 2020
Protection and security the priorities for high-value purchases
Figure 6: Most important factors ranked in order of importance when deciding which payment system to use for less frequent, high-value purchase, RoI, August 2020
Figure 7: Most important factors ranked in order of importance when deciding which payment system to use for less frequent, high-value purchase, NI, August 2020
More than a third of consumers always carry cash
Figure 8: How often consumers carry cash, NI and RoI, August 2020
Consumers focused on security, and open to biometrics
Figure 9: Consumers’ payment behaviours, NI and RoI, August 2020
Consumers not ready to jettison cash for new payment technologies yet
Figure 10: Attitudes towards payment methods, NI and RoI, August 2020
What we think
ISSUES AND INSIGHTS
The future might be cardless rather than cashless
Consumers may now be ready for QR code payments
THE MARKET – KEY TAKEAWAYS
Economic contraction to hit spending, affecting payment method usage
COVID-19 worries affecting payment and buying behaviour
Card payments and credit transfers on the up, cheques in decline
MARKET DRIVERS
Short-, medium- and long-term impact of COVID-19 on payment methods
Figure 11: Expected impact of COVID-19 on payment methods, short, medium and long term, 19 October 2020
Economic challenges almost certain to curtail consumer spending
GDP in RoI expected to contract by 8.5% in 2020, with only partial recovery in 2021
Impact of COVID-19 to hit NI economy with 7.5% contraction in 2020
Consumers already feeling the financial effects of COVID-19
Figure 12: Consumer agreement with the question, ‘How has your financial situation changed since the start of the COVID-19 outbreak in your country?’, NI and RoI, September 2020
Almost half are cutting back on non-essential spending due to COVID-19
Figure 13: Consumer agreement with the statement, ‘I am cutting back on non-essential spending since the start of the coronavirus/COVID-19 outbreak’, NI and RoI, September 2020
Most consumers worried about risk of being exposed to COVID-19
Figure 14: Consumer agreement with the question, ‘How worried are you about the risk of being exposed to the coronavirus/COVID-19?’, NI and RoI, September 2020
Half of all consumers have altered payment behaviour due to COVID-19
Figure 15: Agreement with the statement, ‘The COVID-19/coronavirus outbreak has changed my preferred payment methods’, NI and RoI, August 2020
Figure 16: Agreement with the statement, ‘The COVID-19/coronavirus outbreak has changed my preferred payment methods’, NI and RoI, by gender, age and social class, August 2020
Most consumers believe the virus can be transmitted via cash
Figure 17: Agreement with the statement, ‘The COVID-19/coronavirus outbreak has highlighted hygiene issues with cash’, NI and RoI, August 2020
Figure 18: Agreement with the statement, ‘The COVID-19/coronavirus outbreak has highlighted hygiene issues with cash’, NI and RoI, by gender, age and social class, August 2020
COVID-19 having profound impact on consumers’ shopping behaviour
Figure 19: Agreement with selected statements relating to shopping and spending behaviour since the start of the COVID-19 outbreak, NI and RoI, September 2020
Older consumers most inclined to limit time in-store and avoid use of cash
Younger consumers more likely to use click-and-collect and shop online
Steady growth in number of card payments by Irish consumers
Figure 20: Number of payments per capita, card payments, EU, RoI and UK (incl. NI), 2015-19
Strong, steady growth in contactless payments
Figure 21: Contactless payments, volume, billions, UK (including NI), 2014-18
Figure 22: Contactless payments, volume, millions, RoI, Q4 2016-Q4 2018
Irish consumers making 70-80 credit transfers per annum
Figure 23: Number of payments per capita, credit transfers, EU, RoI and UK (incl. NI), 2015-19
E-payments still niche, but catching on
Figure 24: Number of payments per capita, e-payments, EU, RoI and UK (incl. NI), 2015-19
Steady decline in cheque usage among all consumers
Figure 25: Number of payments per capita, cheques, EU, RoI and UK (incl. NI), 2015-19
INNOVATIONS – KEY TAKEAWAYS
COVID-19 has altered consumer behaviour with using cash
Companies encouraging alternative payment methods
Klarna launch new initiative to tackle impulse buying
LAUNCH ACTIVITY AND INNOVATION
How has COVID-19 affected the way customers can pay in the UK and Ireland?
COVID-19 could further reduce cash transactions
Figure 26: Research showing consumer opinions on a cashless society, UK, 2019
New ways of making contactless payments to stay safe
Companies working together to benefit consumers
KOHO and Dialogue
Virtually queueing for the supermarket
Klarna launch “KlarnaSense”
Vending machines with a twist
THE CONSUMER – KEY TAKEAWAYS
Debit cards (contactless) now the most used in-store payment method
PayPal and debit cards most common methods for online payments
Speed and security the priorities for low-value purchases
Protection and security the priorities for high-value purchases
More than a third of consumers always carry cash
Consumers focused on security, and open to biometrics
Consumers not ready to jettison cash for new payment technologies yet
PAYMENT METHODS USED IN-STORE
Cash no longer the preferred in-store payment method
Figure 27: Payment methods used in-store in the last month, NI and RoI, August 2020
In-store cash usage declining steadily in recent years
Figure 28: Consumers who have used cash as a payment method in-store in the last month, NI and RoI, 2018-20
Debit-card (contactless) usage increasing alongside declining cash usage
Figure 29: Consumers who have used debit cards (contactless) as a payment method in-store in the last month, NI and RoI, 2018-20
Debit cards trump all other payment methods for in-store transactions
Figure 30: Payment methods used in-store in the last month, by category, NI and RoI, August 2020
Older consumers, C2DEFs and those struggling using cash most
Figure 31: Consumers who have used cash as a payment method in-store in the last month, by generation, NI and RoI, 2020
Figure 32: Consumers who have used cash as a payment method in-store in the last month, by own assessment of financial situation, NI and RoI, 2020
Debit card (contactless) now firmly a mainstream payment method
Figure 33: Consumers who have used debit cards (contactless) as a payment method in-store in the last month, by age, NI and RoI, 2020
Figure 34: Consumers who have used debit cards (chip and PIN) as a payment method in-store in the last month, by generation, NI and RoI, 2020
Credit cards
Figure 35: Consumers who have used credit cards (contactless) as a payment method in-store in the last month, by generation, NI and RoI, 2020
Figure 36: Consumers who have used credit cards (chip and PIN) as a payment method in-store in the last month, by age and social class, NI and RoI, 2020
Older consumers unconvinced by e-payments
Figure 37: Consumers who have used payment service via smartphone/device (eg Apple Pay, PayPal) as a payment method in-store in the last month, by generation, NI and RoI, 2020
PAYMENT METHODS USED ONLINE
PayPal and debit cards lead the way for online payments
Figure 38: Payment methods used online in the last month, NI and RoI, August 2020
PayPal a mainstream payment method for consumers
Figure 39: Consumers who have used PayPal as a payment method online in the last month, by gender and social class, NI and RoI, August 2020
Figure 40: Consumers who have used PayPal as a payment method online in the last month, by generation, NI and RoI, August 2020
Debit cards a primary choice for consumers of all ages
Figure 41: Consumers who have used a debit card online in the last month, by generation, NI and RoI, August 2020
Credit cards favoured by ABC1s and older consumers
Figure 42: Consumers who have used a credit card as a payment method online in the last month, by gender and age, NI and RoI, August 2020
Figure 43: Consumers who have used a bank transfer as a payment method online in the last month, by social class, NI and RoI, August 2020
Generation Z (NI) and Millennials (RoI) main users of bank transfers
Figure 44: Consumers who have used a bank transfer as a payment method online in the last month, by generation, NI and RoI, August 2020
FACTORS WHEN CHOOSING PAYMENT METHOD FOR LOWER-VALUE PURCHASES
Speed matters most to RoI consumers during low-value transactions
Figure 45: Most important factors ranked in order of importance when deciding which payment system to use for an everyday, lower-value purchase, RoI, August 2020
NI consumers focused on security during low-value purchases
Figure 46: Most important factors ranked in order of importance when deciding which payment system to use for an everyday, lower-value purchase, NI, August 2020
Protection and security matter most for high-value purchases
Figure 47: Most important factors ranked in order of importance when deciding which payment system to use for less frequent, high-value purchase, RoI, August 2020
Figure 48: Most important factors ranked in order of importance when deciding which payment system to use for less frequent, high-value purchase, NI, August 2020
HOW OFTEN DO CONSUMERS CARRY CASH?
Almost two thirds of consumers always or mostly carry cash
Figure 49: How often consumers carry cash, NI and RoI, August 2020
Men and older consumers most likely to always carry cash
Figure 50: How often consumers carry cash, by gender and age, RoI, August 2020
Figure 51: How often consumers carry cash, by gender and age, NI, August 2020
CONSUMERS’ PAYMENT BEHAVIOURS
Security is a higher priority than speed or convenience
Figure 52: Consumers’ payment behaviours, NI and RoI, August 2020
Willingness to compromise speed for security across all demographics
Figure 53: Agreement with statement, ‘I would accept a slower checkout process (online or in-store) for enhanced security’, by gender, age and social class, NI and RoI, August 2020
Men, younger consumers and ABC1s more open to biometric security
Figure 54: Agreement with statement, ‘I would be interested in using payment methods that incorporate biometric security  (eg fingerprints)’, by gender, age and social class, NI and RoI, August 2020
Uncertainty around sharing personal information with retailers
Figure 55: Agreement with statement, ‘I would be happy to provide more personal information at the checkout to get a more personalised service in the future’, by age, NI and RoI, August 2020
Figure 56: Agreement with statement, ‘I would be happy to provide more personal information at the checkout to get a more personalised service in the future’, by gender and social class, NI and RoI, August 2020
CONSUMER ATTITUDES TOWARDS PAYMENT METHODS
Consumers cautious and conservative around payment methods
Figure 57: Attitudes towards payment methods, NI and RoI, August 2020
Women and older consumers most inclined to see future role for cash
Figure 58: Agreement with the statement, ‘There will always be a need for cash’, by gender and age, NI and RoI, August 2020
...which are also the demographics that value being able to pay bills in post office
Concern that new technologies reduce spending inhibitions
Figure 59: Agreement with the statement, ‘New payment technologies (eg. contactless, digital credit) make it too easy to spend money’, by gender, age and social class, NI and RoI, August 2020
...which perhaps explains interest in being able to set own limits
Figure 60: Agreement with the statement, ‘Setting your own transaction limit on contactless payments would be useful’, by age, NI and RoI, August 2020
Almost half 18-24s put off by too many security checks
Figure 61: Agreement with the statement, ‘Too many security checks when shopping online is off-putting’, by age, NI and RoI, August 2020
Figure 62: Agreement with the statement, ‘Too many security checks when shopping online is off-putting’, by gender and social class, NI and RoI, August 2020
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Data sources
Abbreviations
Consumer research methodology