UK supermarket chain the Co-op has predicted that contactless transactions on mobile phones will outstrip the use of cash within the next ten years, after experiencing a sharp rise in customers using their cards to tap and pay at the till.
A report on consumer behaviour and shopping trends issued by the convenience retailer, which has 2,800 stores and almost 12,000 contactless paypoints, reveals that almost two thirds (65%) of all transactions are paid for with cash.
However, contactless use has trebled in a year as more bank cards with the technology come into use and following the launch of mobile payments such as Apple Pay.
By 2025, the retailer says that 65% of all transactions are predicted to be by mobile phone as it becomes the preferred payment method, with bank cards and cash becoming a thing of the past like cheque books.
The latest figures from The Co-op show contactless has topped almost 11m transactions in a month, up 1.4 million (15%) on the previous period.
Cheryl Marshall, retail chief information officer at The Co-op Food, says: "We've seen incredible growth in contactless and it is the payment medium of tomorrow, although mobiles are ringing the changes. The new technology is perfect for convenience stores as shoppers buy fewer items and speed is important to them."
Despite the time savings, a survey of 2000 shoppers showed a reluctance by some to use the method for more expensive purchases as the ease of contactless loses its appeal as the spend gets in to double figures.
The average basket spend for contactless in convenience stores is £8.66 compared with an average of £18.16 when using chip and pin. Similarly, the average spend on customers buying fuel using contactless is £9.38, compared with £23.28 for a chip and pin purchase, despite the £30 limit.
Says Marchall: "Cash is still king as people enjoy carrying money, however we predict that by 2025 mobile payments will overtake cards and cash."
The forecast has been disputed by the Royal Mint, which issued a statement in defence of the use of notes and coins: “The demise of cash has been predicted for a long time but it remains the currency option the general public turns to for confidence, convenience and security. Cash is still the most prominent payment method for UK Consumers and global demand for coins is as strong as ever.”