Table of Contents
Overview
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- What you need to know
- Issues covered in this report
Executive Summary
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- Current state of the payments sector
- Decline of cash as most popular payment method
- Cheques no longer as important as they once were – but still have a role
- Debit cards the number one form of plastic payment option
- Debit cards forecast to be most common payment method by 2021 in UK (including NI)
- Market factors
- Online access at all-time high among Irish consumers
- Social network-use now a mainstream activity among Irish consumers
- Smartphone ownership nearing 90% among Irish consumers
- Key players and innovations
- The consumer
- Cash remains Irish consumers' preferred payment method
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- Figure 1: Types of payment methods used by consumers (offline and online) in the last month, NI and RoI, April 2016
- Expectation of cashless society – but cash-attachment remains strong
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- Figure 2: Attitudes towards cash and cheques, NI and RoI, April 2016
- Around four in 10 making more use of contactless payments
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- Figure 3: Agreement with statements relating to contactless payments, NI and RoI, April 2016
- Consumers want protection, and are willing to play their part
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- Figure 4: Attitudes towards selected statements relating to security, NI and RoI, April 2016
- Consumers uncertain about advanced payments-related technology
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- Figure 5: Agreement with statements relating to new payment-related technology, NI and RoI, April 2016
- What it means
Issues and Insights
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- Need to provide consumers with alternative budgeting tools
- The facts
- The implications
- Evolution rather than revolution best suits the payment industry
- The facts
- The implications
- Security remains a fundamental issue for consumers
- The facts
- The implications
The Market – What You Need to Know
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- Online access at all-time high among Irish consumers
- Social network shows potential for payment platforms
- Smartphone ownership nearing 90% among Irish consumers
Current State of the Payments Sector
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- Dependence on cash slowly declining in NI and RoI
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- Figure 6: ATM cash withdrawals, by volume (millions) and value (€ billion), RoI, 2005-14
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- Figure 7: Number of cash withdrawals from ATMs, millions, UK (including NI), 2001-14
- The era of cheques is not coming to the end just yet
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- Figure 8: Volume (millions) and value (€ billions) of cheques processed, RoI, 2005-14
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- Figure 9: Volume (millions) and value (£ billions) of cheques processed, UK (including NI), 2013-16*
- Debit cards now established as dominant plastic payment option
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- Figure 10: Volume of card payments, debit and credit, millions, RoI, 2005-14
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- Figure 11: Value of card payments, debit and credit, € billions, RoI, 2005-14
- Figure 12: Volume of card purchases, debit and credit, millions, UK (including NI), 2009-15
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- Figure 13: Value of card purchases, debit and credit, £ billions, UK (including NI), 2009-15
- Popularity of contactless payments adding to debit cards' dominance in UK (including NI)
- Debit cards on course to be most common payment method by 2021
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- Figure 14: Average monthly payments by UK (including NI) consumers, actual and forecast, 2015 and 2025
Market Drivers
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- More Irish consumers are online than ever before
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- Figure 15: Internet take-up, NI, 2010-15
- Figure 16: Households with internet access, RoI, 2009-15
- Vast majority have fixed or mobile broadband
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- Figure 17: Households with internet access classified by type of internet access, RoI, 2015
- Majority of consumers using social networks on regular basis
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- Figure 18: Social networks that consumers log on to regularly (ie log on to at least once per week), NI and RoI, April 2016
- Around half of all consumers using at least one messaging app
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- Figure 19: Messenger apps that consumers log on to regularly (ie log on to at least once per week), NI and RoI, April 2016
- Almost nine in 10 Irish consumers now own smartphones
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- Figure 20: Ownership of or access to mobile technology devices, May 2015-April 2016
- Cheques' days may not be numbered after all
Competitive Strategies and Innovations – What You Need to Know
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- PayPal launches PayPal Credit
- Apple Pay expands into e-commerce
- Google launches Android Pay
- Visa explores biometrics to enhance security of online payments
- Barclays expands bPay range with bPay Loop
- ABN AMRO and Tikki enable payments using Whatsapp
Who’s Innovating?
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- Morpho teams up with Visa to develop biometric authentication
- Barclays expands its contactless wearables range
- ABN AMRO enables payments via Whatsapp
Competitive Strategies
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- PayPal
- Key facts
- Competitive strategy
- Apple Pay
- Key facts
- Competitive strategy
- Android Pay
- Key facts
- Competitive strategy
- Bitcoin
- Key facts
- Competitive strategy
The Consumer – What You Need to Know
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- Cash remains Irish consumers' preferred payment method
- Debit cards a close second in terms of preferred method
- Credit card usage significantly behind debit card usage
- Consumers not ready to jettison cheques just yet
- Direct debits, standing orders and transfers all established methods
- PayPal dominating alternative payment methods
- Expectation of cashless society – but cash-attachment remains strong
- Around four in 10 making more use of contactless payments
- Consumers want protection, and are willing to play part
- Consumers uncertain about advanced payments-related technology
The Consumer – Types of Payment Methods Used
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- Cash is still king when it comes to preferred methods of payment
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- Figure 21: Types of payment methods used by consumers (offline and online) in the last month, NI and RoI, April 2016
- Cash the most 'democratic' of payment methods – used by all consumers
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- Figure 22: Consumers who have used cash as a payment method in the last month, by gender, age, and social class, NI and RoI, April 2016
- Debit cards a close second in terms of preferred method
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- Figure 23: Consumers who have used debit cards (chip & PIN, online and contactless) as a payment method in the last month, NI and RoI, April 2016
- Chip & PIN debit card use common across all demographics
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- Figure 24: Consumers who have used a debit card (chip & PIN) as a payment method in the last month, by gender and age, NI and RoI, April 2016
- Use of debit cards online peaks among younger consumers
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- Figure 25: Consumers who have used a debit card (online) as a payment method in the last month, by gender, age, and social class, NI and RoI, April 2016
- ABC1s most inclined to use contactless debit cards
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- Figure 26: Consumers who have used a contactless debit card as a payment method in the last month, by gender, age, and social class, NI and RoI, April 2016
- Credit cards around half as popular as debit cards
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- Figure 27: Consumers who have used credit cards (chip & PIN, online and contactless) as a payment method in the last month, NI and RoI, April 2016
- Credit cards usage highest when consumers transacting online
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- Figure 28: Consumers who have used a credit card (online) as a payment method in the last month, by gender, age, and social class, NI and RoI, April 2016
- Older consumers and ABC1s most likely to use pay with credit cards via chip & PIN
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- Figure 29: Consumers who have used a credit card (chip & PIN) as a payment method in the last month, by gender, age, and social class, NI and RoI, April 2016
- Cheque usage weighted towards older consumers and ABC1s
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- Figure 30: Consumers who have used cheques as a payment method in the last month, by gender, age and social class, NI and RoI, April 2016
- Direct debits, standing orders and transfers the modern cheques
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- Figure 31: Consumers who have used direct debits/standing orders as a payment method in the last month, by gender and age, NI and RoI, April 2016
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- Figure 32: Consumers who have used a bank transfer as a payment method in the last month, by age and social class, NI and RoI, April 2016
- PayPal the clear leader among alternative payment methods
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- Figure 33: Consumers who have used PayPal, Android payment app, Apple Pay and Bitcoin as a payment method in the last month, NI and RoI, April 2016
- PayPal usage reasonably high among all consumers
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- Figure 34: Consumers who have used PayPal as a payment method in the last month, by age and social class, NI and RoI, April 2016
The Consumer – Attitudes towards Cash and Cheques
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- Most believe cash and cheques are on the way out
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- Figure 35: Attitudes towards cash and cheques, NI and RoI, April 2016
- Broad agreement that usefulness of cheques is waning
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- Figure 36: Agreement with statement, 'I think cheques are becoming obsolete', by gender, age and social class, NI and RoI, April 2016
- Older consumers more resistant to idea of a cashless society
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- Figure 37: Disagreement with statement, ‘I feel a 'cashless society' is inevitable in the future’, by gender and age, NI and RoI, April 2016
- ABC1s more inclined than C2DEFs to agree that cashless society is imminent
- Around half recognise value of cash for budgeting purposes
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- Figure 38: Agreement with statement, ‘Using cash is the easiest way to keep track of spending’, by gender and age, NI and RoI, April 2016
- Half agree, one in five disagree that cash is a more secure method of paying
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- Figure 39: Agreement with statement, ‘Cash is a more secure method of payment’, by gender, age and social class, NI and RoI, April 2016
- Preference for cashless methods highest among younger consumers
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- Figure 40: Agreement with statement, ‘I prefer to use cashless payment methods when possible (eg contactless card)’, by age and social class, NI and RoI, April 2016
The Consumer – Attitudes towards Contactless Technology
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- Around four in 10 consumers using contactless more than they did last year
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- Figure 41: Agreement with statements relating to contactless payments, NI and RoI, April 2016
- Growth in contactless use coming from ABC1s and 25-34s
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- Figure 42: Agreement with statement, ‘I am using contactless payments more compared to 12 months ago’, by gender, social class and age, NI and RoI, April 2016
- Handing control to consumers would appeal to around 40%
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- Figure 43: Agreement with statement, ‘I would like to be able to set daily limits on how much I can spend with contactless payments (eg £100/€100 limit per day)’, by gender, social class and age. NI and RoI, April 2016
The Consumer – Attitudes towards Security
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- Majority of consumers want and value consumer protection
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- Figure 44: Attitudes towards selected statements relating to security, NI and RoI, April 2016
- Demand for protection broadly consistent across all ages
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- Figure 45: Agreement with statement, ‘I am less likely to use a payment method that doesn't have some type of consumer guarantee or protection’, by gender and age, NI and RoI, April 2016
- Six in 10 believe biometric measures would improve online security
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- Figure 46: Agreement with the statement, 'I think that biometric measures (eg fingerprints, iris scan) would help to improve online payment security', NI and RoI, April 2016
The Consumer – Attitudes towards New Technology
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- Consumer dubiousness when it comes to payments and social media
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- Figure 47: Agreement with statements relating to new payment-related technology, NI and RoI, April 2016
- Tech-savvy consumers open to alternative means of verifying identity
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- Figure 48: Agreement with statement, ‘I would be interested in alternative means of verifying my identity when buying stuff online (eg taking a selfie instead of a password)’, by daily internet usage and devices in household, NI and RoI, April 2016
- Majority would be uncomfortable sending payments via social media
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- Figure 49: Agreement with statement, ‘I would be comfortable using a social media or messaging app (such as Facebook Messenger or Whatsapp) to send payments to friends or family’, by daily internet usage, NI and RoI, April 2016
Appendix – Data Sources, Abbreviations and Supporting Information
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- Data sources
- Abbreviations
Appendix – The Consumer
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- NI Toluna tables
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- Figure 50: Types of payment methods used by consumers (offline and online) in the last month, by demographics, NI, April 2016
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- Figure 51: Types of payment methods used by consumers (offline and online) in the last month, by demographics, NI, April 2016 (continued)
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- Figure 52: Types of payment methods used by consumers (offline and online) in the last month, by demographics, NI, April 2016 (continued)
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- Figure 53: Agreement with the statement ‘Using cash is the easiest way to keep track of spending’, by demographics, NI, April 2016
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- Figure 54: Agreement with the statement ‘Cash is a more secure method of payment’, by demographics, NI, April 2016
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- Figure 55: Agreement with the statement ‘I feel a 'cashless society' is inevitable in the future’, by demographics, NI, April 2016
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- Figure 56: Agreement with the statement ‘I think low domination coins should be taken out of circulation (eg 5p)/5c)’, by demographics, NI, April 2016
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- Figure 57: Agreement with the statement ‘I prefer to use cashless payment methods when possible (eg contactless card)’, by demographics, NI, April 2016
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- Figure 58: Agreement with the statement ‘I think biometric measures (eg fingerprints/iris scan) would help to improve online payment security’, by demographics, NI, April 2016
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- Figure 59: Agreement with the statement ‘I would be interested in alternative means of verifying my identity when buying stuff online (eg taking a selfie instead of a password)’, by demographics, NI, April 2016
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- Figure 60: Agreement with the statement ‘I am using contactless payments more compared to 12 months ago’, by demographics, NI, April 2016
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- Figure 61: Agreement with the statement ‘I am less likely to use a payment method that doesn’t have some type of consumer guarantee or protection’, by demographics, NI, April 2016
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- Figure 62: Agreement with the statement ‘I would like to be able to set daily limit on how much I can spend with contactless payments (eg £100/ €100) limit per day)’, by demographics, NI, April 2016
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- Figure 63: Agreement with the statement ‘I think cheques are becoming obsolete’, by demographics, NI, April 2016
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- Figure 64: Agreement with the statement ‘I would be comfortable using a social media or messaging app (eg Facebook Messenger, Whatsapp) to send payments to friends and family’, by demographics, NI, April 2016
- RoI Toluna tables
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- Figure 65: Types of payment methods used by consumers (offline and online) in the last month, by demographics, RoI, April 2016
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- Figure 66: Types of payment methods used by consumers (offline and online) in the last month, by demographics, RoI, April 2016 (continued)
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- Figure 67: Types of payment methods used by consumers (offline and online) in the last month, by demographics, RoI, April 2016 (continued)
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- Figure 68: Agreement with the statement ‘Using cash is the easiest way to keep track of spending’, by demographics, RoI, April 2016
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- Figure 69: Agreement with the statement ‘Cash is a more secure method of payment’, by demographics, RoI, April 2016
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- Figure 70: Agreement with the statement ‘I feel a 'cashless society' is inevitable in the future’, by demographics, RoI, April 2016
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- Figure 71: Agreement with the statement ‘I think low domination coins should be taken out of circulation (eg 5p/5c)’, by demographics, RoI, April 2016
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- Figure 72: Agreement with the statement ‘I prefer to use cashless payment methods when possible (eg contactless card)’, by demographics, RoI, April 2016
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- Figure 73: Agreement with the statement ‘I think biometric measures (eg fingerprints/iris scan) would help to improve online payment security’, by demographics, RoI, April 2016
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- Figure 74: Agreement with the statement ‘I would be interested in alternative means of verifying my identity when buying stuff online (eg taking a selfie instead of a password)’, by demographics, RoI, April 2016
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- Figure 75: Agreement with the statement ‘I am using contactless payments more compared to 12 months ago’, by demographics, RoI, April 2016
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- Figure 76: Agreement with the statement ‘I am less likely to use a payment method that doesn’t have some type of consumer guarantee or protection’, by demographics, RoI, April 2016
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- Figure 77: Agreement with the statement ‘I would like to be able to set daily limit on how much I can spend with contactless payments (eg £100/€100) limit per day)’, by demographics, RoI, April 2016
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- Figure 78: Agreement with the statement ‘I think cheques are becoming obsolete’, by demographics, RoI, April 2016
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- Figure 79: Agreement with the statement ‘I would be comfortable using a social media or messaging app (eg Facebook Messenger, Whatsapp) to send payments to friends and family’, by demographics, RoI, April 2016
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