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Consumer Payment Preferences - UK - November 2014

Published By :

Mintel

Published Date : Nov 2014

Category :

Banking

No. of Pages : 67 Pages

Developers should reframe their task from making it easier to make a payment, and focus on making it easier to find and make purchases. Payments are a means to an end for consumers, payment platforms should remember this.
Table of Content

Introduction

Abbreviations

Executive Summary

Use of payment methods
Cash is the most frequently used method…
Figure 1: Use of payment methods, September 2014
but it is only the first choice when it comes to smaller purchases
Figure 2: Use of payment methods, by type of transaction, September 2014
Contactless cards
Nearly a fifth have paid with a contactless card
Figure 3: Ownership and use of contactless cards, September 2014
Satisfaction with Chip & PIN is holding back contactless cards
Figure 4: Reasons for not using a contactless card, despite owning one, September 2014
Security of payment methods
Cash is seen as the most secure option
Figure 5: Confidence in security of payment methods, September 2014
Factors affecting choice of payment method
Convenience and speed are key for small transactions…
Figure 6: Factors affecting choice of payment method for a small purchase, September 2014
while security is the main concern for larger purchases
Figure 7: Factors affecting choice of payment method for a large purchase, September 2014
Payments and retailers
Choice of payment method is of relatively little importance to consumers
Figure 8: Attitudes towards payment methods and retailers, September 2014
What we think

Issues and Insights

Make methods about more than just paying
The facts
The implications
Mobile payments need to develop independent security identities
The facts
The implications
A cashless society is widely expected, but not welcomed by most
The facts
The implications

Trend Application

Will we trust Apple and Google with our financial data?
A well-engaged youth can help boost mobile payments
User-friendly spending charts can help with budgeting

Recent Developments in Payments

Key points
Expansion in contactless cards
Adoption of contactless payments by TfL pushes contactless into the mainstream
Issue rate of contactless cards is growing
MasterCard and Zwipe have developed a biometric card
Apple Pay set to revolutionise NFC industry
Apple Pay rolls out in the US
Cash on Tap
Wearables
Barclays prepares to launch bPay band…
while CaixaBank has brought payment wristbands to Spain
Apple’s smartwatch to include Apple Pay
Google Glass to allow users to ‘Nod to Pay’
Mobile payment and wallet services
PayPal to split from eBay after improvements to mobile services
Zapp widens partnerships in preparation for launch
Visa Europe to expand its V.me mobile wallet
PayPal and eBay embrace Bitcoin
Peer-to-peer mobile payments
Paym enjoys strong debut…
Social transactions
Send cash in a tweet
Online purchases set to be streamlined by Twitter Buy
Venmo makes personal finance social
Goodbye to paper money

Use of Payment Methods

Key points
Cash is still the most commonly-used payment method
Figure 9: Use of different payment methods, September 2014
Small dip in regular Chip & PIN use
Most people have experience of many payment methods
Figure 10: Repertoire of payment methods used, September 2014
Young adults are most likely to use the most methods…
Figure 11: Repertoire of payment methods used, by age, September 2014
Resistance to innovation can be overcome…
but older consumers have so far shunned mobile payments
Figure 12: Any use of mobile transfers, by age, September 2014

Preferred Payment Method by Type of Transaction

Key points
Cash is only first choice for the cheapest purchases
Figure 13: Preferred payment methods, by type of transaction, September 2014
Chip & PIN is first-choice for everything else…
and debit cards are generally favoured
Purchasing habits are hitting cash use

Contactless Card Ownership and Use

Key points
Two fifths of consumers have a contactless card
Figure 14: Ownership and use of contactless cards, September 2014
Ownership of contactless cards has doubled in two years…
Figure 15: Ownership of contactless cards, 2012-14
and owners are increasingly likely to use their cards
Figure 16: Use of contactless cards by those who own one, 2012-14
Young adults are most likely to use contactless feature…
Figure 17: Use of contactless cards, by age, September 2014
while Londoners continue to lead the way
A third still do not want a contactless card

Barriers to Contactless Card Use

Key points
Satisfaction with Chip & PIN hinders contactless payments
Figure 18: Reasons for not using contactless cards, September 2014
Security fears also put people off
Consumers are aware of improving infrastructure
Figure 19: Agreement with the statement that “not enough shops accept contactless cards”, 2012-14
Consumers are clear about the barriers that must be overcome

Attitudes towards Security of Payment Methods

Key points
Physical payments seem the most secure…
Figure 20: Confidence in security of payment methods, September 2014
despite them having their own dangers
People are happier to disclose card, not account, information
Mobile payment platforms need to improve their security message

Factors Affecting Choice of Payment Method

Key points
Small purchases are dictated by convenience…
Figure 21: Factors affecting choice of payment method for a small purchase, September 2014
while security and getting the best deal influence large payments
Figure 22: Factors affecting choice of payment method for a large purchase, September 2014
Making my money work for me
Figure 23: Agreement with statements on credit card reward schemes, May 2014
A third want help with maintaining budgets…
which apps can provide
Who’s watching?

Attitudes towards Payment Methods and Retailers

Key points
Payment options will always be a marginal factor…
Figure 24: Attitudes towards payment methods and retailers, September 2014
but can influence some consumers’ decisions
Contactless is still not a major draw
Figure 25: Agreement with the statement “I prefer shopping at retailers that accept contactless cards’, by ownership of contactless cards, September 2014
People can see the cashless society on the horizon…
but most aren’t happy about it

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