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Cashless Payments

The Future Foundation has been closely tracking the growing phenomenon of cashless payments. Here we showcase some of the most salient highlights of our research to explore how close we are to becoming a cashless society and what this will mean for brands.

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•    Future Foundation Research shows that consumers are increasingly receptive to alternative forms of payment to the traditional cash-based model.  

•    Debit and credit cards are now the default means of payment for even the lowest value items, squeezing cash even further. As many as 41% of Britons agree that "I feel comfortable paying for items worth less than £5 using a card".

•    An enduring legacy of the recent recession is the prominence of discount vouchers as a means of payment. In Future Foundation Research from 2010, 40% of consumers stated that they "often pass on high street discount vouchers to friends and family". The use of vouchers therefore remains very steady, even if it is no longer rising. And the future of the discount voucher appears assured in the longer term as it increasingly goes ‘mobile’: an explosion of location-based apps will enable shoppers to receive vouchers for nearby shops and leisure venues directly to their mobile.  

•    The shift to mobile payments will be slower than anticipated. It will very much depend on the development of necessary infrastructures in shops and leisure venues and consumers will continue to express serious concerns regarding the security of mobile payments for the foreseeable future. Only 17% of consumers agree that "mobile phones are as safe as computers when it comes to securing your personal information" (Future Foundation Research, 2010).

•    But we expect these anxieties to fade gradually as consumers begin to trust the technologies available and are seduced by the overwhelming time-saving and -convenience benefits involved. There is a clear appetite for the convenience afforded by mobile technologies - over half the population (53%) claims to be "interested in any technology that saves me time". And there is widespread acceptance that the future of money will be mobile - a majority of 68% of Britons agree that "In the future, I expect that telephone banking will be replaced by internet and ‘smart phone’ banking" (Future Foundation Research, 2010).

•    As smartphone penetration rates continue to climb, consumers will exploit a range of budgeting, price comparison, m-banking and m-commerce apps, and many will come to regard the mobile phone as a monetary controller. We are confident of the steady acceleration of mobile payments, even if it does occur at a slower rate than expected.

•    We also anticipate that anxieties about the threat to one’s privacy – as a result of companies tracking us through a growing number of electronic transactions - will become less vocal. Already 68% of us claim to trust retailer websites with our personal details and payment information when buying goods or services online. If relinquishing some of our personal data is seen to equate with enriched value and service, then it seems highly likely that the consumer will progressively consider this an acceptable exchange.

•    The younger generation of consumers appears particularly receptive to this departure from cash. It is a significant minority of 18% of 16 to 24 year olds who state they "don’t like paying for things in cash" and this sentiment will become much more widespread in future.

•    Future Foundation forecasts indicate that by 2014, at least half the population, 52%, will be conducting their banking online. It is these sorts of established parallel initiatives that will help consumers to make the transition to cashless payments.

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The Future Foundation helps companies to make better decisions. Decisions which ultimately drive shareholder value.

We view the world through a consumer lens and enable our clients to plan the future with their customers at the epicentre.

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