With modern payment technology, British people continue to battle inflation, economic stagnation, and the overall potential recession issue. As we’ve seen since the rise of the internet, convenience is king. Despite early anxieties and fear-mongering tales of theft, it seems that the UK is as gung-ho on contactless payments as a country could get.
Going cashless looks to be becoming an easier and easier process for the Fintech-savvy nation, predominantly because of the early adoption and convenience of contactless. Here’s how the UK has become such a contactless-craving country, and how it plays into the wider space of personal finance.
Contactless payments are becoming the norm
Contactless is very much the in-thing right now in face-to-face transactions. For the majority, it’s all about swinging out the credit or debit card and tapping it down on the terminal. Others go further, utilising the NFC technology embedded in modern smartphones to tap in their payments. Either way, it’s far more convenient than typing in a four-digit pin or counting out the cash.
In 2020, contactless payments in the UK hit 9.6 billion, marking a 12 per cent surge in 2019. This 9.6 billion mark also meant that 27 per cent of all payments made in the UK came through contactless technology. All-in, 83 per cent of people making purchases in the UK had used contactless payments at some point that year, with 17.3 million registered to use their smartphone or smartwatch to make payments.
Last year, the numbers grew further, continuing the trajectory of the user-friendly payment method. Nearly three-in-five card payments made in the UK were made via a contactless transaction in 2021. Overall, 32 per cent of all payments we made via smartphone, smartwatch, or contactless cards – showing a surge of five per cent over a matter of 12 months.
As the world becomes more convenient, payments follow
We live in the most convenient time in human history. Anything that we could possibly want can get delivered to our door the next day – or even in hours, in some cases – with a few taps. Understandably, the internet has been the main driver of this desire for the most convenient options. It’s not just for information, though, as eCommerce’s continued rise has corrected course in 2022.
Internet sales now account for 25.3 per cent of total retail sales – understandably down from its 37.8 per cent peak in January 2021, but up on February 2020’s count of 19.1 per cent. People crave the quickest and easiest way to get what they want, and in finance, businesses have to move fast to react to this. The UK as a whole was a fast adopter of contactless payments – from vendors to providers – but now, convenience is a selling point.
The key theme here is that convenience is king, and while it can be a sound selling point for primary products, making the range of services more convenient will only further enhance the brand and help customers.
This is important during this time of increasing prices. People want help but still covet convenience. The holy grail of top-quality assistance is convenience and usability. To hit this goal in the rising cost of living, banking services should aim to refine the convenience of the tools that can help at this time. These include budget planners available in apps, quick access to support like temporarily arranged overdrafts, and at-the-ready spending insights in the app.
Banking institutions will continue to become the focus increasingly as costs rise and the UK sinks into a recession in 2023. It’s the platforms that make their useful resources convenient, ideally via an app, that will stand out from the crowd and appeal to more people.
Having the tools that will help but having them buried behind a stack of menus or only on the website will shed a fair bit of the usefulness; they need to be front-and-centre, mobile-accessible, and easy to use.
Contactless has become a dominant force in payments because it’s quick, easy, and convenient. Smartphones and smartwatches can be a little less convenient as sometimes they need unlocking. Contactless cards, however – with contactless debit cards being the nation’s favourite – the whole process is seamless. The next evolution will probably be the checkout-less stores that don’t require any additional movements to take payments.
