Are we Heading for a Cash-Free High Street?

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The Great Disrupter

The COVID-19 pandemic has had a significant impact on so many areas of our daily lives since it began. Including the ways in which we make in-person payments in shops, bars, restaurants and other environments where transactions for goods or services are carried out. The pandemic could be pushing us towards a cash-free future sooner than we might think, with consumers favouring card and contactless transactions.

Against this background, we surveyed 1,000 UK consumers about the ways that they use cash and contactless card payments, and how the pandemic may have changed their attitudes and habits, forever.

A Perfect Storm

Our survey highlighted two major findings, which when brought together make a compelling case for realising that the use of cash in the high street maybe a thing of the past. Contactless has always been seen to be more convenient, quicker and more secure, by removing the use of chip and pin at the point of sale. Amid the ongoing pandemic, it now adds a layer of personal wellbeing which has been driving an increase in the use of contactless payments. Our survey mirrored this change in consumer behaviour with 60% of respondents having increased their use of contactless.

A Smart Move

At almost exactly the same time as the UK, most of Europe went into full lock down and the contactless limit was raised to £45. As Stephen Jones CEO of UK Finance put it, “An increase in ways to pay, coupled with the change in people’s payment habits may have inadvertently gone some way to prepare the nation for the impact of COVID-19 on their daily lives.” The fact that 63% of those surveyed supported this statement shows that the change in behaviour was rapid and decisive.

A Sense of Wellbeing

In the current situation we find ourselves in, creating an environment in which a customer feels comfortable is a critical part of the new normal. Taking mobile and contactless payments allows payments to be made at a time and place anywhere convenient to customers, away from the restrictions of the traditional point of sale, reducing dwell time and creating a more hygienic environment. And contactless removes the need to handle cash – something that nearly 40% said was important to their own sense of personal wellbeing.

Contactless Payments – Where Next?

With nearly 60% wanting to see contactless payments automatically available in shops and 50% expecting the same in pubs, and restaurants, it is interesting to note that public transport was a sector where a substantial percentage wanted to see greater access to contactless payments. VISA has been quick to react. They recently rolled out contactless “Tap and go” payments across 500 cities worldwide in a response to a change in customer behaviour, who saw taking public transport as a potential health risk. Contactless is joining up those operational efficiencies for the operator in terms of faster boarding times driven by faster payment transactions whilst once again helping with that sense of wellbeing for the paying public.

Cash isn’t Dead!

Whilst more people are using contactless payments than ever before in the UK, our research shows that not everyone is ready yet to embrace it as their only method of payment for physical transactions. On a tight budget, using cash is still seen as a safe bet. You know what you have, and spending is easier to keep track of.

It’s very clear that the COVID-19 pandemic has driven a massive increase in the use of contactless payments throughout the retail and hospitality industries, with other sectors such as public transport now finding those same benefits in a socially distanced world. Those hygienic benefits of not having to touch the technology, combined with the speed and convenience factor are the perfect storm, as Mark Crysell, Chief Sales Office, Ergonomic Solutions, notes: “With the contactless limit now raised, more of those transactions can also now be frictionless and therefore quicker, without physical contact and without queuing!”

Download the full report to find out more about how and why consumers payment habits have changed and look likely to continue to rapidly evolve and what they would like to see from mobile enabled payments and other frictionless payment technology in future.

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