During the next decade, our cash will always be at hand…
NFC and web-enabled mobile phones continue to transform the future of payment methods, with major implications for the way we will shop and interact with brands in the future. Will we soon move from a cashless to a wallet-less existence?
Richard Nicholls analyses the Future Foundation’s Spring 2012 research into mobile payments and the “cashless society”…
Mobile payment: the level of interest
Mobile phones are slowly becoming capable of organising every aspect of our lives. So it seems a natural process that they become the all-in-one device for storing and handling all aspects of our retail transactions.
The demanding consumer of the 2010s who is interested in instant gratification and ultra simplicity in their interactions will welcome this shift to a more streamlined experience.
Over a third of consumers say they are interested in using a mobile phone to execute routine tasks such as banking or paying bills. This rises to 55% for those aged between 16 and 34-years-old.
And if it were safe and easy to do so, nearly half of consumers say they would consider using their mobile phone to pay for goods and services in the future. Again, the younger demographic expresses the most interest, with nearly 70% of 16 to 34-year-olds in agreement.
Mobile payment is still in its infancy but maturing rapidly, with early adopters already on board while others wait on the docks. Over the next decade, consumer transactions and interactions with brands will be dramatically altered.
The cashless society
An increasing number of consumers are saying that they do not like to pay for things with cash – this is true for nearly one in five consumers and rises to 30% for those aged between 25 and 34-years-old.
April 2012 saw O2 launch its digital wallet, the features of which included money message, whereby customers can “securely transfer [between £1 and £500] to any UK mobile phone number as easily as sending a text” and O2 money account card, a prepaid Visa account which allows customers to manage their finances by spending only the money that has been preloaded to the card.
Earlier, in January 2012, Starbucks launched an iPhone payment app which allows customers to pay for items by scanning a unique barcode displayed on their smartphone while at the point of purchase.
Although it is naturally low-value purchases (“a small purchase under £10”) that garner the most interest for paying via mobile phones, there is also support for using mobile phones to pay for clothes, meals out, tickets and the weekly grocery shop.
Moving forward, location-based software has the potential to encourage a more spontaneous approach to leisure and retail, inviting shops to adopt new tactics to lure shoppers in store, devising tailored promotions delivered direct to the consumer’s phone (as they walk past) or rewarding them with extra membership card points for using their mobile phone to pay.
The shape of things to come
One can assume that consumers will be more receptive of new technologies once familiarity is established and well-known brands begin accepting, even promoting, cashless payments.
However, for NFC and mobile payment technology to be fully integrated as customary practice, infrastructure and privacy concerns must be addressed.
Currently we find that over 60% worry about security when using a mobile phone to do their banking and a majority believes that the desktop computer is safer for storing personal information on compared to a mobile phone.
As the infrastructure for NFC technology and mobile phone payment builds, becoming a more common feature in store, the cashless uptake will rise on the promise of ever greater speed and convenience.
The next 10 years will see consumers no longer need to hold a mental map of where the nearest ATM is located or ask about the minimum spend requirements at bars, cafés and corner shops. With NFC technology and NFC-enabled mobile phones, our cash will always be at hand.
Over this decade, mobile payment will become completely integral to our way of life and we will be dramatically less tied to cash and wallets. Simply put, cash will become less useful.