Table of Contents
Introduction
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- Abbreviations
Executive Summary
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- Key payment methods currently in use
- Plastic card use rivals that of cash
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- Figure 1: Key payment methods used by consumers, September 2013
- Overall use of contactless cards is improving…
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- Figure 2: Contactless card ownership, September 2013
- … but many continue to have their doubts about the technology
- Payment security concerns
- Consumers particularly wary of mobile payments and contactless cards
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- Figure 3: Concern about security, by payment method, September 2013
- Just over a quarter have experienced payment fraud during the past five years
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- Figure 4: Consumer experience with payment fraud during the last five years, September 2013
- Interest in new payment technology
- Interest in mobile payments down from last survey
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- Figure 5: Interest in mobile payments, September 2013
- 85% show interest in at least one mobile wallet feature
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- Figure 6: Interest in mobile wallet services, September 2013
- Attitudes towards payments
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- Figure 7: Any agreement with select statements about payments, September 2013
- What we think
Issues and Insights
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- Why aren’t people embracing mobile payments?
- The facts
- The implications
- It’s not mobile payments that will drive adoption of digital wallets
- The facts
- The implications
- Could payment processing firms be marginalised?
- The facts
- The implications
Trend Application
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- Dispelling the myths about security flaws
- Coping with disruptive forces in payments
- A sign of things to come from Japan
Recent Developments in Payments
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- Key points
- Contactless cards
- Number of cards in issue rises to more than 36 million
- Growth in the number of retailers accepting contactless payments
- Mobile payment and wallet services
- Peer-to-peer mobile payments
- PayPal
- Pingit
- Payments Council
- NFC-enabled mobile payments
- EE Cash on Tap
- Weve
- Visa mobile wallet
- Other developments
- Apple
- MasterCard
- PayPal
- Square
- Twitter and Amex
- Clinkle
Use of Payment Methods
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- Key points
- Cash still plays a big role in payments but is just one of many options
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- Figure 8: Use of payment methods, September 2013
- Range of payments used continues to evolve
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- Figure 9: Repertoire of payment methods used, September 2013
- For the moment nothing rivals the versatility of plastic cards
- The decline of the cheque as a predictor of the long-term future of cash?
- Under-35s driving the evolution of payments
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- Figure 10: Any use of select payment methods, by age, September 2013
- Affinity for PayPal shows that resistance to change can be overcome
- Two in five would like to use a service like PayPal on the high street…
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- Figure 11: Level of agreement with the statement “I’d like to be able to use services like PayPal on the high street”, September 2013
- … but the PayPal inStore app has some kinks to work through
Preferred Payment Method by Type of Transaction
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- Key points
- Cash for coffee but mostly plastic cards for everything else
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- Figure 12: Use of payment methods by type of transaction, September 2013
- Debit is the plastic card of choice
- The higher the purchase cost the more likely a credit card will be used
- So far contactless cards no threat to cash for low value purchases
Trust in the Security of Payment Methods
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- Key points
- Seven in 10 agree that more technology increases the risk of fraud
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- Figure 13: Level of agreement with the statement “The more technology that’s involved in payments, the greater the risk of fraud”, September 2013
- Young adults less attached to the notion that new technology is unsafe
- Unease about mobile payments and contactless cards abounds
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- Figure 14: Concern about security by payment methods, September 2013
- Owning a smartphone doesn’t do much to ease mobile payment fears
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- Figure 15: Concern about security if using a mobile phone as payment device or contactless payment cards, by select demographics, September 2013
- People are least worried about services like PayPal
- Payment detail anonymity makes people feel more secure
Experience of Payment Fraud
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- Key points
- Less than three in 10 have been a victim of payment fraud in recent years
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- Figure 16: Consumer experience with payment fraud during the last five years, September 2013
- Consumers are well protected against the most common forms of fraud
- Cash-related fraud leaves consumers more exposed to loss
- Past experience of fraud heightens fears about using new payment tech
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- Figure 17: Concern about security by select payment methods, by consumer experience with payment fraud during the last five years, September 2013
Contactless Card Ownership and Use
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- Key points
- A third of adults own a contactless payment card
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- Figure 18: Contactless card ownership and use, September 2013
- Consumers now have more places to actually use the cards
- People finally starting to see the point of the technology
- Men, under-35s and the affluent pushing contactless forward
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- Figure 19: Contactless card ownership and use, by demographic profile, September 2013
- Three in 10 Londoners have made a payment with a contactless card
- Two in five adults don’t want anything to do with contactless technology
- Many likely oblivious to the fact they have a contactless card
- Contactless cards may never truly enter the mainstream
Attitudes Towards Contactless Cards
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- Key points
- Contactless payments being held back by Chip & PIN technology…
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- Figure 20: Reasons for not using contactless cards, September 2013
- …and security concerns
- Unfavourable news stories and blog posts raise fears
- Most still believe contactless cards should only be issued by choice
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- Figure 21: Level of agreement with the statement “Banks should only issue contactless cards when customers specifically ask for them”, September 2013
- Some risk of alienating customers, but this can be overcome
- Concerns about contactless payments don’t really match up with reality
- Accepting contactless cards can help attract and retain customers
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- Figure 22: Level of agreement with the statement “I’m more likely to use shops/restaurants which accept contactless payments”, September 2013
Interest in Mobile Payments
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- Key points
- Nearly two in five interested in mobile payments
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- Figure 23: Interest in mobile payments, September 2013
- Interest fading as initial launch of mobile payments fails to impress
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- Figure 24: Interest in mobile payments, 2010-13
- Despite a flawed introduction, mobile payments have a bright future
- More than half of under-35s interested in mobile payments
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- Figure 25: Interest in mobile payments, by select demographics, September 2013
- Positive feedback on security by early users vital for wider adoption
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- Figure 26: Concern about security by payment methods, by Interest in mobile payments, September 2013
Interest in Mobile Wallet Services
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- Key points
- Healthy levels of interest in mobile wallet services
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- Figure 27: Interest in mobile wallet services, September 2013
- With instant alerts, the role of mobiles in finance becomes more tangible
- Most interest focused on the non-payment aspect of mobile wallets
- Seven in 10 smartphone users open to receiving personalised offers
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- Figure 28: Interest in mobile wallet services, by smartphone users, September 2013
- 55% show interest in seven or more mobile wallet services
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- Figure 29: Repertoire of interest in mobile wallet services, September 2013
- Figure 30: Repertoire of interest in mobile wallet services, by select demographics, September 2013
- A positive link between interest in wallet services and mobile payments
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- Figure 31: Interest in making mobile payments, by repertoire of consumer interest in mobile wallet services, September 2013
Attitudes Towards Payments
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- Key points
- Resistance to change is strong…
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- Figure 32: Any agreement with select statements about payments, September 2013
- Figure 33: Level of agreement with the statement “I don’t see any need to change the way we pay for things since it works fine as it is”, September 2013
- … yet many think more should be done to improve efficiency
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- Figure 34: Level of agreement with the statement “I think that payment companies should be doing more to make payments more convenient and efficient”, September 2013
- 29% of under-35s say they’re ready to give up cash
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- Figure 35: Level of agreement with the statement “I’d prefer to be able to stop using cash altogether”, September 2013
- Less affluent more attached to cash
- Mixed feelings about the long-term future of cash
- Data privacy is an issue for 55% consumers
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- Figure 36: Level of agreement with the statement “I am uncomfortable with the amount of data that is collected about my spending habits”, September 2013
- Established firms have the edge in payments but this is eroding
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- Figure 37: Level of agreement with the statement “I wouldn’t trust anyone other than banks or established credit card companies when it comes to making payments”, September 2013
- Payment processing firms under threat
Appendix – Use of Payment Methods
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- Figure 38: Use of payment methods – Any plastic card, by demographics, September 2013
- Figure 39: Use of payment methods – Any Chip & PIN, by demographics, September 2013
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- Figure 40: Use of payment methods – Any online plastic card, by demographics, September 2013
- Figure 41: Use of payment methods – Cash, by demographics, September 2013
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- Figure 42: Use of payment methods – Debit card, by demographics, September 2013
- Figure 43: Use of payment methods – Direct debit/standing order, by demographics, September 2013
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- Figure 44: Use of payment methods – Debit card (online), by demographics, September 2013
- Figure 45: Use of payment methods – PayPal, by demographics, September 2013
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- Figure 46: Use of payment methods – Credit card, by demographics, September 2013
- Figure 47: Use of payment methods – Bank transfer, by demographics, September 2013
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- Figure 48: Use of payment methods – Cheque, by demographics, September 2013
- Figure 49: Use of payment methods – Credit card (online), by demographics, September 2013
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- Figure 50: Use of payment methods – Barclays Pingit, by demographics, September 2013
- Figure 51: Use of payment methods – Barclaycard PayTag, by demographics, September 2013
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- Figure 52: Use of payment methods – Bitcoin, by demographics, September 2013
- Figure 53: Agreement with the statement ‘I’d like to be able to use services like PayPal on the high street’, by demographics, September 2013
- Repertoire
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- Figure 54: Repertoire of use of payment methods, by demographics, September 2013
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Appendix – Preferred Payment Method by Type of Transaction
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- Figure 55: Use of payment methods by type of transaction – Cup of coffee, by demographics, September 2013
- Figure 56: Use of payment methods by type of transaction – Your weekly grocery shop, by demographics, September 2013
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- Figure 57: Use of payment methods by type of transaction – A meal out, by demographics, September 2013
- Figure 58: Use of payment methods by type of transaction – Buying a DVD/book/CD, by demographics, September°2013
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- Figure 59: Use of payment methods by type of transaction – A holiday, by demographics, September 2013
- Figure 60: Use of payment methods by type of transaction – A new washing machine, by demographics, September°2013
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- Figure 61: Use of payment methods by type of transaction – New clothes, by demographics, September 2013
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Appendix – Trust in the Security of Payment Methods
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- Figure 62: Agreement with the statement ‘The more technology that’s involved in payments, the greater the risk of fraud’, by demographics, September 2013
- Figure 63: Concern about security by payment methods – Using my mobile phone as a payment device, by demographics, September 2013
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- Figure 64: Concern about security by payment methods – Using contactless payment cards as a payment device, by demographics, September 2013
- Figure 65: Concern about security by payment methods – Using debit cards as a payment device, by demographics, September 2013
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- Figure 66: Concern about security by payment methods – Using credit cards as a payment device, by demographics, September 2013
- Figure 67: Concern about security by payment methods – Using non-bank payment services, by demographics, September 2013
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Appendix – Experience of Payment Fraud
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- Figure 68: Consumer experience with payment fraud during the last five years, by demographics, September 2013
- Repertoire
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- Figure 69: Repertoire of consumer experience with payment fraud during the last five years, by demographics, September 2013
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Appendix – Contactless Card Ownership and Use
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- Figure 70: Contactless card ownership, by demographics, September 2013
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Appendix – Attitudes Towards Contactless Cards
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- Figure 71: Reasons for not using contactless cards, by demographics, September 2013
- Figure 72: Agreement with the statement ‘Banks should only issue contactless cards when customers specifically ask for them’, by demographics, September 2013
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- Figure 73: Agreement with the statement ‘I’m more likely to use shops/restaurants who accept contactless payments^’, by demographics, September 2013
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Appendix – Interest in Mobile Payments
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- Figure 74: Interest in mobile payments, by demographics, September 2013
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Appendix – Interest in Mobile Wallet Services
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- Figure 75: Interest in mobile wallet services – Ability to check your card/bank balance on your mobile phone before you buy something, by demographics, September 2013
- Figure 76: Interest in mobile wallet services – Instant notification if a purchase would take you over your overdraft limit, by demographics, September 2013
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- Figure 77: Interest in mobile wallet services – Ability to transfer small amounts to your friends via your mobile, by demographics, September 2013
- Figure 78: Interest in mobile wallet services – Ability to store discount vouchers on your phone and apply them at the checkout, by demographics, September 2013
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- Figure 79: Interest in mobile wallet services – Ability to store other types of cards in the same mobile wallet, by demographics, September 2013
- Figure 80: Interest in mobile wallet services – Ability to store multiple credit and debit cards in one mobile wallet, by demographics, September 2013
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- Figure 81: Interest in mobile wallet services – Ability to store medical/personal records in case of emergency, by demographics, September 2013
- Figure 82: Interest in mobile wallet services – Ability to store electronic receipts/warranty documents etc for purchases that you have made, by demographics, September 2013
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- Figure 83: Interest in mobile wallet services – Personalised offers based on your shopping habits and location, by demographics, September 2013
- Repertoire
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- Figure 84: Repertoire of Interest in mobile wallet services, by demographics, September 2013
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Appendix – Attitudes Towards Payment
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- Figure 85: Agreement with the statement ‘I don’t see any need to change the way we pay for things since it works fine as it is’, by demographics, September 2013
- Figure 86: Agreement with the statement ‘I think that payment companies should be doing more to make payments more convenient and efficient’, by demographics, September 2013
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- Figure 87: Agreement with the statement ‘I wouldn’t trust anyone other than banks or established credit card companies when it comes to making payments’, by demographics, September 2013
- Figure 88: Agreement with the statement ‘I am uncomfortable with the amount of data that is collected about my spending habits’, by demographics, September 2013
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- Figure 89: Agreement with the statement ‘I’d prefer to be able to stop using cash altogether’, by demographics, September 2013
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