Plastic fiver out-of-step with changing payment preferences

Plastic fiver out-of-step with changing payment preferences

The Bank of England's plastic £5 note enters into circulation Tuesday, but the launch of the new fiver will be a non-event for the 30% of the UK population who claim only to use cash "if they absolutely have to", according to research from Worldpay.

Indeed, one third of the 2500 consumers surveyed by Research Now believe cash will become obsolete by 2020, rendering the hoopla surround the release of the new synthetic notes as distinctly out-of-step with changing payment preferences.

The arrival of Apple Pay and Android Pay has spurred two thirds (67%) of 16-34 year olds surveyed to leave their wallets at home, instead choosing to pay with their smartphones. And it’s not just the younger generation buying in to this movement, says Worldpay, with fully 54% of UK consumers expecting their smartphones to replace their card as the main method of payment within the next five years.

The drift away from cash is being increasingly driven by the popularity of tap-and-pay contactless shopping on the high street; a quarter of UK consumers polled claim to avoid shops that don’t take cards.

A year on from the increase in the contactless payment limit and 37% of shoppers told Worldpay they would like to see the ceiling rise again to over £30 - this number rose to 45% of respondents in London.

James Frost, chief marketing and commercial officer at Worldpay comments: “The shift that we are seeing in terms of consumer preferences and what shoppers now expect from the high street is seismic and paying with cash is an inconvenience for many of today’s shoppers."

Jenny Campbell, CEO of ATM provider YourCash Europe, which owns 5000 cash machines across the UK, Ireland, Netherlands and Belgium, unsurprisingly take a different tack, describing the advent of the new note as an "exciting development" for UK consumers.

"Stronger, safer, cleaner and more resilient than paper money, the long-term benefits of the new note are immensely encouraging as is the Bank of England’s investment in it which shows the value of cash and how despite the rise in digital payments, it’s here to stay," she says. "I think its hugely important that we continue to invest in developing cash, as we do other payment methods to facilitate greater consumer choice."

Comments: (3)

Melvin Haskins
Melvin Haskins - Haston International Limited - 12 September, 2016, 12:19Be the first to give this comment the thumbs up 0 likes

I am entertained by the fact that 833 people surveyed by Research Now believe thar cash will be obsolete in four years. Who are these people? In a seperate news note last week we are told that the amount of cash issued by ATMs in the Uk has increased each year for the last five years. Whilst there is no doubt that more payments are being made by electronic means than ever before I believe that cash still has a lot of life in it yet.

Richard Sanders
Richard Sanders - Hermosa Consulting - Southend on Sea 12 September, 2016, 17:04Be the first to give this comment the thumbs up 0 likes

I agree with Melvin there seems to be an anomaly here and it would be interesting to know the survey structure in terms of age groups and locations

A Finextra member
A Finextra member 13 September, 2016, 09:01Be the first to give this comment the thumbs up 0 likes

It's always difficult to predict the future isn't it, whether you are doing something as complex as forecasting the economy or deciding how you are going to vote next Tuesday? Survey respondents typically overstate their attitudinal preference for doing new things whilst understating or being blind to the behavioural and environmental factors which shape their everyday behaviours. Having been on a number of British family holidays in the last few years it's pretty obvious that there are still plenty of businesses around  solely accepting cash which are doing just fine - relying on a card is not a practical approach beyond the metropolitan bubble let along thinking mobile will be enough.  And counter-intuitively the rapid growth of contactless card payment may actually be slowing adoption of mobile pay: NFC cards have clearly made payment quicker and easier and daily use for public transport has made card use habitual. What is the real benefit that in-market mobile payment solutions offer which can break the new normal of paying by contactless card?   

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