Author is Kirsty Berry, Senior PR and Communications Manager at Compass Plus

Conversations around when mobile payments will reach its tipping point have dominated the industry over the past few years, with annual predictions from industry professionals often claiming that the following year would be the year of the mobile. Capgemini’s World Payments Report 2014 suggests that mobile payments will increase to 47 billion transactions by the end of 2015, up from 29.2 billion in 2013. Whilst, Deloitte predicts that 5% of the world’s NFC-enabled mobile phones will be used at least once a month to make contactless payments in-store throughout 2015. Although 5% may not seem significant, it is a ten-fold increase compared to 2014’s 0.5% and does not include payments made on a mobile device through apps or the mobile internet. Mobile payments may not have quite reached tipping point yet, but it is undeniable that consumers are adopting and using the technology, albeit not in the timeframe the industry had expected.

A recent survey conducted by Compass Plus found that more than half of UK consumers would rather leave their wallet or purse at home than their mobile phone. If we couple this with the predicted year-on-year increase of mobile payments, it would be reasonable to believe that mobile payments should be a contender as a primary method for making payments in the future. However, when asked the way they were most likely to pay in 10 years’ time, just 7% of the survey respondents chose mobile payments. In fact, more than double chose cash over mobile payments, whilst an overwhelming majority of three-quarters of all respondents believed that cards would be their primary payment method in 2025. These figures might seem surprising when we take into account current industry discussions focusing on a cashless society and mobile as the future of payments, however in these circumstances it is important to look at current consumer habits and beliefs.

A 2014 survey from Compass Plus found that nearly all respondents had used cash in the past month, 60% had paid with cards and 24% had used mobile payments. The variety of ways people currently pay for goods and services is not startling – consumers want choice. What is surprising, however, is that cash was used by significantly more consumers than the other payment methods. This is even more interesting when we consider reports from The Payments Council stating that electronic payments had surpassed cash transactions in the UK in 2014.

With nearly a quarter of respondents making mobile payments, it would be acceptable to think, like with most new technologies, that adoption will only increase. However, other findings from the survey could explain why consumers do not think mobile will be their main method for making payments in the next 10 years – more than 70% believe it to be the least secure way to pay. This view was not just confined to older respondents, but a concern shared by every age group. With many industry spokespeople claiming that millennials are driving the change in banking and payments technology, the current belief that mobile payments are the least secure way to pay could explain why only 7% of consumers think that they could become their main way to pay. This makes even more sense when the survey also showed that cash and cards are thought to be the most secure ways to pay.

Of course there are variants when it comes to age, millennials are more likely to commit to mobile payments, than older generations (16% compared to 6%), and vice versa when it comes to cash, but the clear and consistent leader across all age groups for making payments in the future was cards. What is evident is that whilst the industry reports about the death of cash and the rise of the cashless society, its use will decline as consumers start to use more electronic methods to pay, it will not die out as expected. Similarly, industry expectations have mobile payments pinned as the future particularly amongst millennials, yet they are still not willing to jump into the deep end and commit to mobile payments as a primary method any time soon.

There are barriers when it comes to all new technologies and until universal beliefs around security are dealt with head on by consumer education adoption is likely to be slow. A new technology does not become the go-to method overnight, however much industry players believe or want it to. Both cash and cards have been ingrained in society and consumer behaviour for decades, whilst mobile payments are new so it is not surprising that today’s consumers plan to continue to use what they know and trust in 2025.

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