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CONSUMERS AND PAYMENT INNOVATION - UK - MAY 2018

Published By :

Mintel

Published Date : May 2018

Category :

Banking

No. of Pages : N/A

Facing up to new payment methods will be a gradual process, particularly with facial recognition authentication feeling so much more personal than a fingerprint scan. Some people have a natural aversion to new payment methods, as shown by scepticism towards smartphone and contactless options. Providers will need to give users time, space, and support to become more comfortable with each innovation that comes to market.

Table of contents

OVERVIEW
What you need to know
EXECUTIVE SUMMARY
The market
Contactless spending grows without impinging on cash use
Figure 1: Monthly contactless card spend and average contactless card transaction value, May 2014-June 2017
Companies and brands
Launch activity and innovation continues apace
The consumer
Cash is still the most frequently used payment type
Figure 2: Use of payment methods, aggregated, users in the last 6 months, February 2018
People are most likely to have used a desktop or laptop to pay
Figure 3: Devices used for paying online, February 2018
Poor technical performance could hold payments apps back
Figure 4: Barriers to payment app use, February 2018
Biometrics offer convenience for users
Figure 5: Comfort with payment innovations, February 2018
Most people feel contactless payments expose them to fraud
Figure 6: Attitudes towards payment innovation, February 2018
What we think
ISSUES AND INSIGHTS
Could using selfies for purpose, rather than pleasure, face resistance?
The facts
The implications
PayPal is poised to make a clean sweep of the payment space, but will it?
The facts
The implications
THE MARKET – WHAT YOU NEED TO KNOW
Contactless spending looks set to continue growing despite concerns
MARKET CONTEXT
Contactless spending looks set to continue growing despite concerns …
Figure 7: Monthly contactless card spend and average contactless card transaction value, May 2014-June 2017
… supported by broader roll-out of contactless-enabled cards
Figure 8: Number of contactless cards issued, May 2014-June 2017
Cash withdrawals have reached a plateau
Figure 9: Cash withdrawal volumes, including by customers using their own banks’ or building societies’ ATMs, 2001-17
Implementation of PSD2 lays the groundwork for payments integration
COMPANIES AND BRANDS – WHAT YOU NEED TO KNOW
Payment providers explore the potential of blockchain technology
LAUNCH ACTIVITY AND INNOVATION
Retailers and payment providers begin to respond to cryptocurrencies
Currency specialist Revolut introduces cryptocurrency exchange
Cosmetics retailer Lush begins accepting Bitcoin online
Santander launches blockchain currency transfer service
Glint counteracts volatility by offering payment in gold
Foodservice industry looks to payment apps for efficiency
Mastercard Qkr! app offers bill splitting solution for foodservice
Wetherspoon launches ‘Order and Pay’ app
Amazon opens first checkout-free Amazon Go grocery store in the US
THE CONSUMER – WHAT YOU NEED TO KNOW
Cash is still the most frequently used payment type
People are most likely to have used a desktop or laptop to pay
Poor technical performance could hold payments apps back
Biometrics offer convenience without compromising security
Most people feel contactless exposes them to fraud
PAYMENT METHOD USE
Cash is still the most frequently used payment type
Figure 10: Use of payment methods, February 2018
Figure 11: Use of payment methods, aggregated, users in the last 6 months, February 2018
Contactless wrestles with familiar barriers
Over-55s the most reluctant to adopt contactless
Figure 12: Use of payment methods, aggregated, by demographics, February 2018
DEVICES AND METHODS USED FOR PAYING ONLINE
People are most likely to have used a desktop or laptop to pay
Figure 13: Devices used for paying online, February 2018
69% of under-25s have made a smartphone payment or transfer
Figure 14: Devices used for paying online, by age, February 2018
Apps more commonly used than browsers on mobile devices
Figure 15: Paying online using a tablet or smartphone, app vs browser, February 2018
Older people are more likely to stick with apps
Figure 16: Paying online using a tablet or smartphone, app vs browser, by age, February 2018
BARRIERS TO PAYMENT APP USE
Poor technical performance could hold payments apps back
Delays prove tough to tolerate
Figure 17: Barriers to payment app use, February 2018
Figure 18: Number of barriers to payment app use, February 2018
Innovation can help reduce barriers, rather than building them
Figure 19: Comfort with payment innovations, by barriers to payment app use, February 2018
COMFORT WITH PAYMENT INNOVATIONS
Biometrics offer convenience without compromising security
Contactless smartphone payments suffer dual security fears
Figure 20: Comfort with payment innovations, February 2018
Figure 21: Comfort with payment innovations, February 2018
Under-45s show interest in native messenger app payments
Figure 22: Comfort with selected payment innovations, by age, February 2018
ATTITUDES TOWARDS PAYMENT INNOVATION
Most people feel contactless exposes them to fraud
Figure 23: Attitudes towards payment innovation, February 2018
The public questions the need for more payment methods
Under-45s more likely to feel comfortable with a fully cashless society
Figure 24: Attitudes towards cashless payment methods, by age, February 2018
The practicalities of facial recognition may face resistance
Figure 25: Agreement with the statement ‘I would be comfortable allowing retailers to hold data relating to my personal appearance’, by comfort with payment innovations, February 2018
Currency specialists could profit from messaging app integrations
Figure 26: Agreement with the statement ‘I like the idea of using a payment card linked to an app that holds your foreign currency for spending abroad’, by comfort with payment innovations, February 2018
APPENDIX – DATA SOURCES, ABBREVIATIONS AND SUPPORTING INFORMATION
Abbreviations
Consumer research methodology

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