Table of Contents
Executive Summary
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- The market
- Cashless payments are on the rise
- Developments are concentrated on mobile…
- …but it is not just out with the old and in with the new….
- …and we are long way from becoming a completely digital economy
- The consumer
- Awareness and usage of alternative payment methods is mixed
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- Figure 1: Awareness and usage of alternative payment methods, July 2015
- For consumers, choice is the best option
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- Figure 2: Consumer use of payment methods within the last six months, July 2015
- Security concerns are less of a barrier than in the past
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- Figure 3: Consumer security rankings of different payment methods, July 2015
- Incumbents and new entrants need to collaborate
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- Figure 4: Consumer payment app expectations, July 2015
- Mobile payments are the next frontier
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- Figure 5: Attitudes towards payment methods, July 2015
- What we think
Issues and Insights
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- Incumbents and new entrants need to collaborate to innovate
- The facts
- The implications
- For consumers, choice is what matters
- The facts
- The implications
- The need to overcome the security barrier
- The facts
- The implications
The Market – What You Need to Know
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- Cashless payments are on the rise
- Developments are concentrated on mobile…
- …but it is not just out with the old and in with the new
- A fully digital economy remains a long way off
Recent Developments in Payments
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- Cashless payments on the rise
- Mobile phones are the next payments frontier
- Phone as contactless
- Payment apps
- Incumbents fight to stay relevant
- Barclays leads the way…
- …but others are not far behind
- Payments get social
- Rethinking the traditional
- Cheques get a digital makeover
- Monese helps the traditionally unbanked participate in payments
- Fidor lands in the UK
- Payments get superpowers
- The disruptive potential of blockchain
- Going beyond payments
- Squirrel
- xWare42
- Ravelin
Regulatory Development in Payments
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- The role of regulation in innovation
- Recent regulatory developments
- EU caps card fees
- Credit card market under review
- Creating a European payments market
The Consumer – What You Need to Know
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- Awareness and usage of alternative payment methods is mixed
- Progress provides choice
- Security concerns remain rife
- Mobile payments are the next frontier
- Incumbents and new entrants need to collaborate
Awareness and Use of Alternative Payment Methods
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- The power of brand aids awareness
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- Figure 6: Consumer awareness of alternative payment methods, July 2015
- Awareness is split by gender
- Generation X are most engaged
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- Figure 7: Awareness of alternative payment methods, by generation, July 2015
- Adoption rate is slow
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- Figure 8: Use of alternative payment methods, July 2015
Use of Payment Methods
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- Over a third have used a contactless card within the last six months
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- Figure 9: Consumer use of payment methods within the last six months, July 2015
- New technologies needed to relaunch cheques
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- Figure 10: Consumer use of payment methods, July 2015
- For consumers, choice is the best option
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- Figure 11: Number of payment methods used within the last six months, July 2015
- Mobile wallets could help navigate the payments minefield
Security Concerns
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- Consumers reassured by chip and PIN
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- Figure 12: Consumer security rankings of different payment methods, July 2015
- Experience of contactless cards does little to allay concerns
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- Figure 13: Most highly rated payment method in terms of security, by those who have used a contactless card in the last six months, July 2015
- Time and biometrics could tip the balance
Mobile Payment Apps
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- Banks are expected to produce ‘best’ mobile payment apps
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- Figure 14: Consumer payment app expectations, July 2015
- Younger consumers put their faith in tech companies
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- Figure 15: Consumer expectations of a payment app produced by a tech company, by age, July 2015
Attitudes towards Cash
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- Consumers rely on cash for security and budgeting purposes
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- Figure 16: Consumer attitudes towards cash, July 2015
- Age and income divide opinion
Barriers to Uptake of Payments Innovation
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- Majority of consumers see no need to change the way we pay
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- Figure 17: Consumer attitudes towards factors affecting uptake of new payment methods, July 2015
- Concerns over security and acceptance remain major barriers
- These concerns slow the rate of adoption, but don’t prevent progress
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- Figure 18: Payment methods used within the last six months, by agreement with statements about payment methods, July 2015
Factors Influencing Choice of Payment Method
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- Convenience is most important factor for consumers
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- Figure 19: Consumer attitudes towards factors influencing their choice of payment method, July 2015
- Contactless debit cards could become payment method of choice
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- Figure 20: Payment methods used within the last six months, by agreement with the statement “When making a purchase I use whichever payment method is the most convenient at the time”, July 2015
- Reward-driven consumers
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- Figure 21: Consumer payment preferences – CHAID – Tree output, July 2015
Consumer Interest in Smartphone Payments
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- Majority uninterested in using smartphone to pay…
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- Figure 22: Attitudes towards smartphone payments, July 2015
- …but this could change over time
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- Figure 23: Agreement with the statement “I’d like to be able to use a smartphone to pay for purchases in shops, restaurants and other high street stores”, by age, July 2015
Appendix
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- CHAID Analysis Methodology
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