The Future of Cash Looks Bleak
Expert Market's latest analysis into the future of UK payments has revealed that over a third of people think cash will become obsolete in the next 25 years.
We surveyed over 1,600 people to gauge the public's feeling towards cash, cards, mobile payments and everything in between.
A Millennial Mindset
Our survey clearly showed that millennials (here defined as those aged between 21 and 36), are slowly but surely veering away from cash in favour of contactless, mobile payments and apps. 33% of millennials avoid using cash altogether, with 1 in 5 carrying less than £5 cash in their purse or wallet. Equally, 41% of millennials prefer to pay friends back by apps than with cash.
For cash only businesses, this growing cash-phobia among millennials is going to have a direct impact on their bottom line. A mammoth 46% of this age group are put off from buying from a cash only business. 68% have been frustrated at not being able to part with their money at a cash only store. It is this sort of frustration that drives customers away from a cash only store, troubling news for the 100
Nowhere is this cash-phobic attitude exemplified more than in the finding that 24% of millennials have thrown cash in the bin on purpose!
Cash is no longer a valued commodity for millennials, but what about the older generations?
Baby Boomers and Generation Xers
It is not just millennials who have moved away from cash in recent years. Our survey showed that 34% of generation X (age 37-52) and 34% of baby boomers (age 53-69) thought cash would become obsolete in the next 25 years. According to the UK public, the days of slot machines, games arcades and cash only businesses are numbered!
How Your Business Can Embrace the Cashless Society
Contactless payments are small value card purchases (up to £30) that are made without the need to enter a PIN. Contactless payment systems are considered to be of enormous benefit for merchants who sell small value items in volume, particularly those in the hospitality trade. They are significantly faster to process than conventional chip and PIN and also faster than cash. An additional benefit over cash is there are fewer errors and less opportunity for fraud.
Contactless payments in the UK have been possible for some time, but security concerns meant that they were slow to be adopted; however today almost all debit and credit cards can incorporate contactless technology. Interestingly the first contactless card was a contactless Barclaycard issued in 2007.
Contactless cards contain an embedded microchip that uses radio waves to communicate with a card reader. An antenna in the chip resonates with the card reader circuitry when it is in close proximity. Electrical power is provided to the card through this inductively coupled circuit so there is no need for the card to have a battery.
Contactless Card Issuers
Almost every bank in the UK now issues contactless cards. These are generally provided automatically when a card is replaced and can be requested by any current card user.
Although it was a while before contactless payments really took off, the adoption of the technology by McDonalds and other large brands really set the ball rolling. Currently in the UK we spend around £250 million a month on 32 million contactless payments. The average payment is around £9.40 on debit cards and slightly higher on credit cards.
Are Contactless Cards Secure?
Despite initial concerns contactless cards are nearly as secure as chip and pin cards. Typical losses dues to fraud are 1p in £100; more or less the same as chip and PIN. Card issuers will make good any fraudulent losses as long as reasonable precautions and care have been taken. MasterCard is currently trailing contactless cards that use biometric data such as fingerprints and finger vein detectors for verification.
Currently there is a £30 limit on transactions. This has been agreed by the banks and it might be increased in the future. However there is no limit to the amount you can spend using contactless payments other than the usual limits on your card. However if the fraud detection system spots any suspect activity, you might be requested to enter your PIN.
It is estimated that there are over 400,000 contactless terminals in the UK. Most modern chip and PIN machines incorporate a contactless payment facility and every merchant account provider in the UK can supply merchants with these terminals including countertop, portable and mobile models. Smartphones enabled with payment processing apps like iZettle or Square can also now accept contactless payments.
There are some popular modern contactless integrated payment terminals:
Ingenico iCT250 countertop terminal
This countertop terminal integrates chip and PIN and contactless payments and includes the latest PCI PED 2.0 security system. It also has Bluetooth connectivity and can be used as a portable terminal.
Ingenico iWL250 wireless terminal
The Ingenico iWL250 contactless and chip and PIN terminal incorporates Bluetooth technology to connect to a base station and GPRS communication with a roaming SIM that allows payments to be made anywhere there is an available mobile network.
The Hypercom T4220 is a solid countertop terminal with integrated contactless card reader. It is a cost effective solution for smaller merchants who appreciate its high degree of security. The terminal can be locked to the supporting pole for additional protection.
VeriFone VX 680
This is a small handheld portable terminal that is a perfect solution for merchants in the hospitality trade. It incorporates a powerful processor for fast payment processing and a colour touch screen. It incorporates Bluetooth, Wi-Fi and GPRS connectivity.
Accepting contactless payments is a great way to give your business a boost, and a great time saver for bars, restaurants, fast food outlets and anywhere else where low value transactions are high in volume. If you would like to discover more about taking contactless card payments, please complete our web form and you will be provided with quotes tailored to your specific business needs. It takes only a few moments and can save you time discovering the best deal.