As the saying goes: The customer is always right. And as their needs evolve, just look at the convenience the likes of Metro Bank seeks to bring its customers when accessing their money. And with the ever-changing financial options available in the UK through fintech ventures, it stands to reason trade body UK Finance has discovered consumer spending habits are transforming as part of its UK Payment Markets report.
Having researched the nation’s buying behaviour, the study found that Brits are taking on a so-called pick and mix approach to payments, meaning they will adapt and choose as they see fit. Mobile banking grew in popularity in 2018 and was used by 48% of UK adults, up from 41% in 2017. And the number of bank payments using online or mobile options hit two billion as a result of the adoption, up from 1.6 billion over the same period.
The movement towards mobile has been helped along with mainstream players like Apple, Google and Samsung developing their respective Pay apps, which has seen 8.5 million people signing up for payment apps. That’s equivalent to 16% of adults signing up for such services, growing from a mere 2% in 2016.
Still, mobile has a long way to go before overtaking debit cards, which remain the most frequently used option for payments last year since it dethroned cash in 2017. Indeed, plastic was found to account for almost 40% of all payments. With the aiding popularity of contactless payments, 98% of the UK adult population own a debit card and this is set to spike debit card payments to 50% of all countrywide payments by 2024. Even the older generation is welcoming contactless as 61% of over 65s made contactless payments in 2018, up from 50% the year before.
And while cash isn’t the number one choice any more, it’s still the second highest and accounted for 28% of UK payments in 2018. Despite the report’s claim that about 5.4 million consumers choose not to use cash at all and its usage declined by 16% in 2018, it’s still thought that in ten years’ time it will be used in one in ten purchases.
Commenting on the research, Stephen Jones, chief executive of UK Finance, said: “The same pick and mix approach people now take when it comes to music, television or the news is expanding into payments, as consumers take advantage of new technologies to pay in a way that suits them.
“More and more customers are now opting for the speed and convenience of paying with their contactless cards, or using mobile banking to check their balances and make transfers while on the move. This rapid rate of technological change is set to continue over the coming decade, as people embrace the ever-widening number of ways to pay and manage their finances, depending on their needs and lifestyle.”
It is evident that debit cards, contactless and mobile are taking over the way we pay, so retailers need to ensure they’re ready to embrace their customers’ changing demands or risk losing them to rivals.